INTRADAY TECHNICAL ANALYSIS 14 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 remains on the back foot on Monday, traded at $1.13404, hovering just above the 1-week low dropped Friday.

  2. Geopolitical risks in Europe weighed on EUR/USD on concern a Russian invasion of Ukraine is imminent.  EUR/USD was also weighed down Friday on dovish comments from ECB President Lagarde, who pushed back on the prospects for the ECB to raise interest rates.

  3. Later on Monday, European Central Bank president Christine Lagarde will address European Parliament and St Louis Fed president James Bullard, who roiled markets with hawkish comments in the wake of last week's inflation data, will appear on CNBC.

  4. The U.S. Federal Reserve will release its January meeting minutes on Wednesday.

  5. Following that, the 1.126 threshold and the 1.1198 support levels may entertain EUR/USD bears further downside. Alternatively, a clear upside past 1.149 isn’t a green card to the EUR/USD bulls as another resistance zone comprising October 2021 lows near 1.156 will challenge the pair’s upside momentum.

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 climbed 0.10% against the Swiss franc, to trade at 0.92551 franc on Monday.

  2. The dollar advanced on carry-over support from Thursday when the stronger-than-expected U.S. Jan CPI report bolstered the outlook for tighter Fed policy.

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

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

  5. The USD/CHF pair couldn’t manage to hold for long time above 0.9265 level, to trade below it now, which makes us prefer to stay neutral until we get clearer signal for the next trend, through breaching 0.930 resistance or breaking 0.920 support.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 115.784 and 116.076.

-        Support line of 115.200 and 114.908.

Commentary/ Reason:                                        

  1. The dollar slipped to 115.401 yen, from a five-week high of 116.336 last week.

  2. USD/JPY Monday retreated as ramped-up Ukraine tensions hammered stocks and boosted the safe-haven demand for the yen.

  3. The Bank of Japan successfully defended its key bond yield target on Monday, holding the line on its ultra-loose monetary policy, with the 10-year government bond yield falling after the central bank pledged market support to stop rates from going higher.

  4. The BoJ last week said it would buy an unlimited amount of 10-year government bonds at 0.25% to prevent rising global yields from pushing up domestic borrowing costs too much.

  5. Prospects of accelerated U.S. policy tightening and bets that the BoJ would need to taper its ultra-loose monetary policy sent the benchmark 10-year yields to 0.230% last week, the highest since 2016.

  6. The USD/JPY pair has pulled back once again as the 116.0 line strengthens as a key resistance level. Buying pressure has already begun to rise at the 115.20 support level. Price action may once again move towards the ascending trendline where bullish rebounds typically occur.

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. Fed hike expectations held sterling steady at $1.35357 on Monday.

  2. While market braced for hawkishness of Fed, traders also readying for Bank of England to raise rates. Investors were convinced the Bank of England will hike rates next month and pricing about a 40% chance of a 50-basis-point rise.

  3. Growing tensions over Ukraine and the possibility of a Russian invasion is the main geopolitical driver.

  4. The GBP/USD pair tested the key resistance 1.364 and bounced downwards strongly from there, to start pressing decline and head towards 1.346 as a next negative target.

  5. In other events for the week, the FOMC meeting minutes will be released on Wednesday and traders will be on the lookout for discussions regarding near-term policy plans.

GBPUSD