INTRADAY TECHNICAL ANALYSIS 15 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 advanced 0.10% against the dollar, was at $1.13168 in midday having touched $1.12801 the day before, its lowest in more than a week.

  2. The euro edged up a little but was still nursing bruises after two sessions of sharp losses as tensions in Eastern Europe pushed demand for the safe-haven dollar.

  3. The more aggressive outlooks for the Fed funds rate also supportive for the dollar in the near term.

  4. While EUR/USD was under pressure after comments from ECB Governing Council member Rehn on Monday pushed back on ideas that the ECB needs to tighten monetary policy.

  5. The EUR/USD has dropped back towards the descending trendline which now represents a key support area for the pair. A break has not materialised as yet and sellers’ conviction will be tested at this price line. Given the apparent lack of bullish conviction, in both the short and longer-term, a break seems inevitable. 

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 flat against the Swiss franc to trade at 0.92392 franc on Tuesday

  2. Traders' expectations of higher Fed fund rates, and the Russia-Ukraine tensions kept the pair to trade in range.

  3. A high likelihood of the Federal Reserve raising interest rates at its March meeting and sold off in equities supported the greenback.  

  4. While geopolitical tensions between the West and Russia kept the safe haven Swiss franc to hold its ground. Though latest development made the tensions eased slightly when Russian President Putin agreed to Foreign Minister Lavrov’s proposal to keep talking with the West.

  5. In a case where USD/CHF bulls keep reins higher, the 0.9305 threshold and the latest peak surrounding 0.9334, marked in January, will be crucial to watch. 

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 yen was at 115.303 per dollar, after briefly hitting 115.010 on Monday, its strongest in a week.

  2. Tensions in eastern Europe pushed demand for the safe-haven yen, while the greenback was helped by debate about more aggressive U.S. interest rate hikes.

  3. Higher T-note yields on Tuesday also strengthened the dollar’s interest rate differentials.

  4. 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. Sterling was held steady at $1.35361 on Tuesday.

  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. The BoE will be watching Wednesday’s PPI and CPI data to see just how bad inflation is affecting the UK economy.

  3. The FOMC meeting minutes also will be released on Wednesday for traders to be on the lookout for discussions regarding near-term policy plans.

  4. Growing tensions over Ukraine and the possibility of a Russian invasion meanwhile act as the main geopolitical driver.

GBPUSD