INTRADAY TECHNICAL ANALYSIS 10 FEBRUARY (observation as of 06:15 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:
The euro was about flat at $1.14254, stay on the sidelines as traders await the release of U.S. consumer inflation data later today.
The Fed is broadly expected to begin raising rates at its March meeting although there is no clarity about the pace of tightening.
While the euro was gradually retreating this week after President Christine Lagarde on Monday dialled down bets for aggressive interest rate hikes, calming increases this year.
U.S and European government bond yields have been rising as expectations of rate increases grow but were quieter on Wednesday and Thursday morning.
The near-term technical outlook reflects the pair's indecisiveness with the RSI indicator on the chart retreating toward 50. The EUR/USD lacks support in the rally and therefore price action has begun to fade back. Any bullish attempts tend to be short-term, as the overall bias is bearish for the pair.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92882 and 0.93322.
- Support line of 0.92002 and 0.91562.
Commentary/ Reason:
The dollar held in a narrow range against the Swiss franc ahead of U.S. inflation data due later in the day, traded at 0.92426 franc.
The greenback held its gains on firmer buying support, backed by better U.S. economic and employment data.
While the demand for the safe haven Swiss franc also remains, amid geopolitical tensions between the West and Russia, though few positive headlines suggesting the tensions may be easing.
The USD/CHF pair is staying inside a one-week-old trading area. Possibly, the pair may break it to the upside and reach 0.9288. or, the market may start a new decline to break 0.9200 and continue falling with the target at 0.9135.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 115.820 and 116.069.
- Support line of 115.013 and 114.763.
Commentary/ Reason:
The Japanese yen traded at 115.587 per dollar, still weaker than levels below 115 seen against the greenback earlier this week.
The dollar hovering just below a one-month high, boosted by a climb in Treasury yields as traders wait on U.S. inflation data this week for clues on the pace of Federal Reserve policy tightening.
Japan's 10-year bond yield meanwhile pulled back from a session peak of 0.215%, its highest since January 2016. Japan's benchmark yield jumps amid speculation that more hawkish monetary tightening globally could force some action from the Bank of Japan.
USD/JPY has completed another ascending wave towards 115.65; right now, it is trading downwards to reach 114.78. After that, the instrument may start another correction with the target at 115.24.
The USD/JPY pair has failed to move beyond the current price level, on a lack of conviction from buyers. The bulls, however, may not give up the battle. With the MACD growing above its zero and signal lines and the RSI fluctuating comfortably above its 50 neutral mark, scope for further progress in the market.
On the downside, the 115.0 number could immediately come to the defense if sellers dominate. If it fails to hold, the decline could continue towards the 114.76 zone.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.35873 and 1.36493.
- Support line of 1.34633 and 1.34013.
Commentary/ Reason:
The pound was at $1.35317, traded flat against the dollar on Thursday.
The pair were in something of a holding pattern, waiting for the U.S. CPI data, which could offer investors further clues about the pace of the Federal Reserve's monetary tightening.
The GBP/USD continues forming a new consolidation at current range, retreated slightly after expanded the range up to 1.3587 resistance line on Wednesday.
The financial market’s mood seesaws as investors move in turbulent waters. Global central bank tightening monetary policy conditions and rising global bond yields keep market participants nervous.
