INTRADAY TECHNICAL ANALYSIS 7 FEBRUARY (observation as of 07:20 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.14990 and 1.15699.

-        Support line of 1.12697 and 1.11989.

Commentary/ Reason:

  1. The euro was traded at $1.14332, hovering just below the 1-month high touched on Friday, shot up 2.7% last week in its best performance since early 2020.

  2. The euro continued to bask in the glow of a newly hawkish European Central Bank as markets brought forward the likely timing of a first-rate rise and sent bond yields sharply higher.

  3. A break of resistance around $1.150 would open the way to $1.157 and higher. However, a break is weighing with a rise in selling activity as the bullish move begin to stall from lack of support. Momentum indicators are stalling in bullish territory.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.92675 and 0.92867.

-        Support line of 0.92291 and 0.92099.

Commentary/ Reason:

  1. The dollar was flat against the Swiss franc on Monday, traded at 0.92537 franc.

  2. The greenback held its gains on firmer buying support, backed by better U.S. economic and employment data.

  3. Meanwhile the demand for safe haven Swiss franc remains, amid geopolitical tensions between Russia and NATO members kept escalating.

  4. The USD/CHF pair has been in a strong bullish trend in the past few days as focus shifts to the possible divergence between the Fed and the Swiss National Bank (SNB).

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 115.543 and 115.888.

-        Support line of 114.425 and 114.080.

Commentary/ Reason:                                        

  1. The dollar was steady traded at 115.285 yen, extending on three-days rebound.

  2. It fared better on the Japanese yen as the market still sees little chance the Bank of Japan will tighten this year.

  3. USD/JPY also moved higher as the jump in the 10-year T-note yield to a 2-year high undercut the yen.

  4. The USD/JPY bulls remain in the driver’s seat but with a bumpy road ahead. The pair remains on the front foot for the third consecutive day. Though, buyers need to cross a downward sloping trend line from January 04, near 115.54, to keep the reins.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.36075 and 1.36635.

-        Support line of 1.34265 and 1.33705.

Commentary/ Reason:

  1. Sterling was at $1.35337 on Monday, marginally changed from opening. The British pound eased against the dollar on Friday, moving away from the 2-week high touched the day before.

  2. After a recent rally prompted by a hike rate from the Bank of England, the market took a breather, with investors digesting the central bank's guidance to quantitative tightening. Policymakers announced the start of tapering the central bank's £875 billion QE program by immediately stopping reinvesting the proceeds of expired gilts, as well as plans to offload the whole stock of corporate bonds by the end of 2023.

GBPUSD