INTRADAY TECHNICAL ANALYSIS 24 DECEMBER (observation as of 06:50 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:
The euro is trading flat at $1.13285 on Friday, heading for about 0.80% weekly gains.
The dollar was weighed on reduced safe-haven demand as the U.S. stock market continued to rally, as well as expectations for a slightly more dovish Fed due to the Omicron threat. However, the dollar saw underlying support from yesterday’s rise in the 10-year T-note yield, which improved the dollar’s interest rate differentials.
Financial markets maintained the risk-on mood through the Asian and European sessions, resulting in high-yielding currencies appreciating vs the greenback.
EUR/USD is stuck in a range, with a mildly bearish tone in the near term.
The EUR/USD broke out of the previous trading range to the upside. The surge ended at the 1.134 mark on Thursday, just below the resistance line set. By Friday, the pair had retreated. A recovery of the pair might find resistance at 1.135, before reaching the 1.139 December high level zone.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92207 and 0.92391.
- Support line of 0.91613 and 0.91429.
Commentary/ Reason:
The dollar was weighed against the Swiss franc on Friday, traded at 0.91716 franc and hovering just above a 1-week low it touched earlier on the day.
The pair is heading for a 0.60% weekly loss.
A risk-on market mood of so-called Santa rally has kept the greenback on the backfoot, undermined by falling U.S. bond yields.
The Swiss franc appreciates the greenback, despite the risk-on mood in the markets.
On the downside, if the USD/CHF extends its declines, the first support would be at the 0.9163. the breach of the latter would expose around the November 30 daily low at 0.9142.
To the upside, the USD/CHF first resistance would be 0.9220. A decisive break above that level could pave the way for further upside. The next resistance would be 0.9230.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 114.740 and 115.145.
- Support line of 113.930 and 113.477.
Commentary/ Reason:
The Japanese yen traded at 114.394 per dollar, still weaker than levels below 113.5 seen earlier in the week.
The dollar has lost ground on most currencies, except the yen, another safe haven. The pair rose to a 1-week high earlier today and en route to a 0.6% weekly high.
USD/JPY climbed higher as safe-haven demand for the yen was curbed after Japan’s Nikkei Stock Index traded higher.
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.
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.
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.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.34539 and 1.34913.
- Support line of 1.33328 and 1.32953.
Commentary/ Reason:
The pound which struck a month high of $1.34369 on Thursday, was last at $1.33944, headed for a 1.2% on the week.
Risk appetite has improved since Monday, when markets were rattled by government restrictions relating to the spread of Omicron. Cautious optimism that Omicron is less severe than Delta is supporting risk assets
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.
