INTRADAY TECHNICAL ANALYSIS 23 DECEMBER (observation as of 05:50 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.13598 and 1.13905.

-        Support line of 1.12604 and 1.12297.

Commentary/ Reason:

  1. The euro rose 0.12% at $1.13399 on Thursday on top of a 0.40% overnight advance. The euro has gained for the last four sessions.

  2. A jump in European government bond yields was bullish for the euro. Signs of inflation pressures in Europe lifted the 10-year German bund yield to a 3-1/2 week high Wednesday of -0.269% and supported the euro.  The French Nov PPI rose +17.4% y/y, the largest increase since the data series began in 1996.  Hawkish ECB comments on Wednesday also supported EUR/USD after ECB Governing Council member Rehn said the ECB "will respond" if inflation climbs too high.

  3. Lower T-note yields undercut the dollar, while rally in stocks also reduced the liquidity demand for the dollar.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.92571 and 0.92811.

-        Support line of 0.91795 and 0.91555.

Commentary/ Reason:

  1. The dollar was flat against the Swiss franc on Thursday, traded at 0.91887 franc after a 0.40% decline overnight.

  2. A risk-on market mood has kept the greenback on the backfoot, undermined by falling U.S. bond yields.

  3. The USD/CHF pair has been seesawing around the 0.917-0.925 for the last two weeks.

  4. If the USD/CHF breaks to the downside, the first support would be the 200-DMA at 0.9179. the breach of the latter would expose the November 30 daily low at 0.9155.

  5. Alternatively, the first resistance would be 0.925. A decisive break above that level could pave the way for further upside. The next resistance would be the December 15 swing high around the 0.928.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 114.344 and 114.611.

-        Support line of 113.477 and 113.209.

Commentary/ Reason:                                        

  1. The dollar was little changed at 114.155 yen - holding close to an almost one-month high from Wednesday at 114.366.

  2. USD/JPY climbed higher as safe-haven demand for the yen was curbed after Japan’s Nikkei Stock Index traded higher.

  3. The yen also came under pressure after the minutes of the October BoJ meeting on Wednesday said a weaker yen has positively impacted the economy as a whole.

  4. The USD/JPY pair keeps its stability above 114.00 level, noticing that stochastic gains the positive momentum clearly, to support the chances of resuming the expected bullish trend on the intraday basis. The pair might then surpass an intermediate hurdle near 114.34 and aim to test the 114.61 region.

  5. The dollar is expected to strengthen in coming months after a hawkish tilt this month at the Federal Reserve put an interest-rate increase in March on the table, setting the U.S. central bank apart from more dovish peers in Europe, Japan, Australia and elsewhere.

  6. Bank of Japan Governor Haruhiko Kuroda speaks Thursday.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.33949 and 1.34430.

-        Support line of 1.32391 and 1.31974.

Commentary/ Reason:

  1. Sterling was little changed at $1.33527 on Thursday, holding just below a 1-week high recorded overnight after a 0.70% rally.

  2. Risk appetite has improved since Monday, when markets were rattled by government restrictions relating to the spread of Omicron.

  3. Sterling gained, despite data showing Britain's economy grew more slowly than previously thought in the July-September period. Today, traders will also have a chance to take a look at the final reading of the Q3 U.S. GDP Growth Rate report.

  4. Brexit talks regarding the Northern Ireland Protocol are also factor influencing the pair, and on Tuesday, the Irish Prime Minister noted that talks between the EU and the UK were on track for progress. His comments helped GBP/USD stay afloat in positive territory.

GBPUSD