INTRADAY TECHNICAL ANALYSIS 24 JANUARY (observation as of 07:45 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.13699 and 1.13963.
- Support line of 1.12845 and 1.12481.
Commentary/ Reason:
The euro lost 0.20% to 1.13220 on Monday, having failed to sustain a recent rally.
The greenback was supported after a slump in equity markets boosted the liquidity demand for the dollar.
The focus of the week remains largely on the FOMC and Russia-Ukraine tensions.
The pair was weighed on rising geopolitical concerns in eastern Europe. Tensions in Ukraine have been increasing for months after the Kremlin massed troops near its borders, which the West says is preparation for a war to prevent Ukraine from joining NATO.
The FOMC is due to meet on Tuesday and Wednesday to decide on the next steps for U.S. monetary policy.
Looking forward, January’s PMI data will be closely watched for intraday direction. Should Markit figures for the US PMIs match upbeat expectations, inflation fears will have an additional role to weigh on the EUR/USD prices before the Fed’s verdict.
The EUR/USD pair resumes its negative trades after the rise that it witnessed in the previous sessions, supported by stochastic negativity, waiting to break 1.128 to open the way to head towards our next main target that reaches 1.125. Rally have been contained and stronger bullish conviction is required to keep the current trajectory going.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.91910 and 0.92095.
- Support line of 0.90980 and 0.90767.
Commentary/ Reason:
The dollar jumped 0.20% against the Swiss franc on Monday, trading at 0.91354 franc.
The dollar firmed following a slight jump in the T-note yields today, though traders still nervous about the much-watched Federal Reserve meeting later this week.
While the dollar was supported from higher T-note yields in early of the week, the moves in the stocks market unsettled equity investors, underpinning the Swiss franc as a safe-haven currency.
Should the price extend its declines, the 0.909 level could be a turning point for the bearish move. On the other hand, a recovery could retest the 0.919 barrier.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 113.928 and 114.128
- Support line of 113.528 and 113.328
Commentary/ Reason:
The dollar also gained slightly on the safe-haven yen, rose 0.08% to 113.752 per yen.
The Japanese yen tends to benefit from safe haven flows as stocks crumble, keeping the dollar soft and uncomfortably close to recent low of 113.487.
Rebounding U.S. bond yields on Monday revived the greenback demand and remained supportive of the uptick. The dollar was also underpinned by the growing market acceptance that the Fed will tighten its monetary policy at a faster pace than anticipated. Focus will remain to the outcome of a two-day FOMC meeting.
Though escalating geopolitical tensions held back bulls from placing aggressive bets and capped gains. Market participants now look forward to the U.S. PMI prints for a fresh impetus. This, along with the US bond yields and the broader market risk sentiment, should produce some trading opportunities around the USD/JPY pair.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.36868 and 1.37430.
- Support line of 1.35052 and 1.34490.
Commentary/ Reason:
Sterling was slightly lower against the dollar, traded at $1.35372, down 0.11% on the day, and declined to a new 1-week low.
The pound slid on Friday amid rekindled fears of heated inflation and aggressive Federal Reserve policy tightening.
The GBP/USD pair keep the negative pressure valid for the upcoming period, noting that the negative pattern’s targets to reach 1.350 followed by 1.3449.
Bearish trend will remain dominant on the intraday and short-term basis unless the price rallied to breach around 1.3686 and hold above it.
Investors kept monitoring signs of a slowing economic recovery, mounting inflationary pressure, record rises in COVID-19 cases and post-Brexit tensions over the Northern Ireland protocol.
