INTRADAY TECHNICAL ANALYSIS 11 FEBRUARY (observation as of 07:30 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 last down 0.43% at $1.13779 on Friday, slipped to a 1-week low after reaching to 3-month high yesterday. The pair is now heading for around 0.20% weekly loss.

  2. A jump in the 10-year German bund yield to a 3-year high boosted EUR/USD overnight on concern that mounting price pressures in the Eurozone will prompt the ECB to tighten monetary policy sooner than expected.

  3. Dollar sentiment was strengthened after St. Louis Fed President James Bullard told Bloomberg he'd like to see 100 basis points of hikes by July.

  4. The yield on the benchmark 10-year U.S. Treasury note topped 2% for the first time since August 2019.

  5. The dollar whipsawed in choppy trade, after Thursday data showed U.S. consumer prices up 7.5% year-on-year in January, a fourth straight month above 6% and slightly higher than economists' forecasts for a 7.3% rise.

  6. Bond yields have been climbing as investors anticipate the Fed will begin to tighten monetary policy as well as expectations the U.S. central bank will begin to wind down its balance sheet.

  7. Given the mostly lower MACD and RSI line below 50.00, EUR/USD prices are likely to portray lacks support in the rally, as we are now seeing price action begin to float towards the recent descending trendline.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.93057 and 0.93347.

-        Support line of 0.92117 and 0.91827.

Commentary/ Reason:

  1. The dollar was firm against the Swiss franc on Friday after hotter-than-expected U.S. inflation and hawkish comments from a Federal Reserve official unleashed a wave of bets on aggressive rate hikes, though similar pressures worldwide kept a lid on gains.

  2. The greenback rose 0.30% and was last at 0.92820 franc. The pair set for its weekly close around where it started early in the week.

  3. The dollar garnered support today on increased liquidity demand after equities sold off.  

  4. Geopolitical tensions between the West and Russia kept the safe haven Swiss franc to hold ground.

  5. USD/CHF rebounds strongly today but stays in established range. Intraday bias remains neutral first. Further rise will remain mildly in favour if 0.9211 support holds. Break of 0.9305 will resume the choppy rally to 0.9334 high. However, break of 0.9211 will turn bias back to the downside for 0.9182 support.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 116.497 and 116.837.

-        Support line of 115.397 and 115.057.

Commentary/ Reason:                                        

  1. The dollar jumped to a five-week high of 116.336 yen overnight and was floated at 116.054 yen on Friday.

  2. The pair heads for 0.73% weekly gains.

  3. Hawkish comments from St. Louis Fed President Bullard leapt the 10-year T-note yield up to a 2-1/2 year high, boosting dollar. Comments Thursday from St. Louis Fed President Bullard pushed T-note yields higher and were bullish for the dollar when he said the U.S. "inflationary shock" needs a big response, and he favours a 100 bp hike in interest rates by July 1.

  4. Meanwhile the yen plunged on signs the BoJ will boost stimulus measures.  The BoJ on Thursday affirmed its resolve to anchor borrowing costs and yields on Thursday, promising to buy an unlimited amount of 10-year bonds at 0.25% after several days of selling pressure in Japan's bond market.

  5. Intraday bias in USD/JPY remains on the upside with focus on 116.49 high. Firm break there will resume larger up trend with next target is 116.83 resistance. On the downside, though, break of 115.39 minor support will extend to the downside for 115.0 support and possibly below.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.35873 and 1.36493.

-        Support line of 1.34633 and 1.34013.

Commentary/ Reason:

  1. While market braced for hawkishness of Fed, traders also readying for Bank of England to raise rates.

  2. Hike expectations held sterling steady, was last at $1.35289, and headed for 0.34% weekly gains.

  3. Bond markets are braced for more hawkishness when the ECB updates its economic projections next month and swaps pricing indicates a nearly 30% chance the Bank of England raises rates by 50 bps next month.

  4. The GBP/USD continues forming a consolidation at current range, retreated after expanded the range up to 1.3649 resistance line on overnight.

GBPUSD