INTRADAY TECHNICAL ANALYSIS 24 MAY (observation as of 08:15 UTC)


Important Levels to Watch for:

-        Resistance line of 1.07336 and 1.07861.

-        Support line of 1.05639 and 1.05115.

Commentary/ Reason:

  1. The euro continue to advance against the dollar, rose 0.40% to $1.7326, on top of the 1.17% surge from Monday to record a new 3-week high earlier today.

  2. The euro was supported after ECB President Christine Lagarde said policymakers were likely to lift the euro area deposit rate out of negative territory by the end of September.

  3. The euro extended gains while a broad selloff in stock markets failed to boost the U.S. currency's safe haven appeal, with markets view on an exhaustive rally on the back of an aggressive Fed.

  4. However, Eurozone poor growth environment, as well as Russia/Ukraine war along with the proposed Russian oil embargo still could aggravate the common currency.




Important Levels to Watch for:

-        Resistance line of 0.97526 and 0.97997.

-        Support line of 0.96002 and 0.95531.

Commentary/ Reason:

  1. The dollar remains weighed against the Swiss franc, slipping 0.32% having reached a new 3-week low, to last trading at 0.96214.

  2. Optimism that loosening lockdowns in China could help global growth and an unexpected improvement in the German business morale lifted the overall market mood and weighed heavily on the safe-haven dollar.

  3. The dollar also takes the hit from the pre-FOMC minutes investors’ repositioning, shrugging off the rebound in the US Treasury yields. Central banks have been walking a tightrope, trying to regain control of decades-high inflation without causing painful recessions.

  4. Intraday bias in USD/CHF stays mildly on the downside. From a short-term technical perspective, USD/CHF has breached the 0.9700 support once again, with more losses likely in the offing, as the 14-day RSI has crossed the midline for the downside.

  5. On the upside, above 0.9752 minor resistance will turn bias back to the upside for recovery. Bearish trend will remain expected on the intraday basis unless the price rallied to breach 0.9752 and hold above it.




Important Levels to Watch for Today:

-        Resistance line of 128.663 and 129.433.

-        Support line of 127.123 and 126.353.

Commentary/ Reason:                                        

  1. The greenback slipped against pre-eminent haven currency the yen, dropping 0.47% to 127.801 yen.

  2. The Japanese yen benefitting from a weaker dollar as investors scaled back bets that rising US interest rates would drive further dollar gains. Fears that aggressive Federal Reserve rate hikes would tilt the US economy into recession also pressured the greenback and pushed other currencies higher.

  3. The USD/JPY also traded lower as a slump in stocks sparked safe-haven demand for the yen. The lower T-note yields on the day also strengthened the yen and weighed on the greenback.

  4. The widening policy divergence between Japan and the US however, kept downward pressure on the yen. The main reasons why the dollar has been strengthening against the Japanese Yen haven’t changed significantly so there is still the possibility of a resumption of the rally.




Important Levels to Watch for:

-        Resistance line of 1.26304 and 1.26770.

-        Support line of 1.24796 and 1.24330.

Commentary/ Reason:

  1. Sterling was last down 0.10% at $1.25684 on Tuesday, though not far from breaching the 1-month high.

  2. The dollar stays on the back foot, allowing GBP/USD to stay afloat in positive territory. With U.S. Treasury bonds finding demand as safe haven in the current risk-averse market environment, the yield on the 10-year reference is falling and weighing on the dollar.

  3. Sentiment in the foreign exchange market remains guarded as the US Federal Reserve will continue to remain hawkish in its monetary stand, a dynamic that will be elaborated further in the FOMC meeting minutes to be published on Thursday.

  4. Traders also remain anxious and speculated. The potential negative impact of the ongoing Russia-Ukraine conflict on the UK economy, renewed Brexit concerns make it difficult for GBP/USD to go into a steady recovery in the near term.

  5. The GBPUSD pair faces solid resistance, noticing that stochastic begins to get rid of its negative momentum, to support the chances of resuming the positive trades and attempt to surpass the mentioned level to open the way to rally towards the next positive target that reaches 1.26304 and 1.26770.

  6. Therefore, bullish trend is suggested for the upcoming period, noting that failing to breach 1. 26304 may rebound the price bearishly and visit 1.2479 areas initially.