INTRADAY TECHNICAL ANALYSIS 26 MAY (observation as of 07:00 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 was moderately lower to $1.06649 as traders digested the U.S. FOMC meeting minutes regarding rate hikes.

  2. The minutes of the May 3-4 FOMC meeting were supportive of the dollar as they stated that most Fed officials backed 50 bp rate hikes at the next couple of FOMC meetings.

  3. The euro meanwhile held its ground, buoyed by ECB chief Christine Lagarde's comments early in the week flagging an end to negative interest rates in the euro zone in the third quarter, which sent the single currency to a one-month high of $1.07481 on Tuesday.

  4. The EUR/USD pares intraday gains around and while stepping back from an immediate resistance line. The EUR/USD pair keep the bullish trend scenario valid for the upcoming period, supported by stochastic and the EMA50 positivity, waiting to resume the bullish wave that its next main target located at 1.0733. Note that breaking 1.0563 will press on the price to attempt to return to the main bearish track again, to head towards testing 1.0511.




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 rose 0.15% against the Swiss franc on Thursday, was last traded at 0.96231.

  2. The dollar, however, struggles to defend the previous day’s bounce off a one-month low, and now floated just above the mark during Thursday’s quiet session after snapping a two-day downtrend the previous day.

  3. The dollar regained ground amidst investors’ positive mood, which lessen the demand for safe haven franc.

  4. The minutes of the May 3-4 FOMC meeting were also supportive of the dollar.

  5. The USD/CHF pair keeps its stability below the resistance level, to keep the correctional bearish trend valid, organized inside the bearish channel that appears on the chart, waiting to visit 0.9600 as the first negative target.




Important Levels to Watch for Today:

-        Resistance line of 128.158 and 128.817.

-        Support line of 126.026 and 125.367.

Commentary/ Reason:                                        

  1. The dollar was little changed at 127.224 yen, though correcting lower in recent week, tracking the pull-back in U.S. Treasury rates.

  2. Weakening U.S. economic data and rising recession fears also undermined the U.S. dollar against the Japanese yen.

  3. Although the divergence in monetary policy between the Federal Reserve and the Bank of Japan has been a major tailwind for the greenback.




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 slipped 0.10% at $1.25638.

  2. Sentiment in the foreign exchange market remains guarded as the US Federal Reserve continue to remain hawkish in its monetary stand, following the FOMC minutes meeting that showed that majority Fed officials are backing up the 50 bp rate hikes.

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

  4. The GBP/USD pair begins today with clear positivity to attempt to breach 1.2630 level, reinforcing the expectations of continuing the bullish trend, paving the way towards our next positive target that reaches 1.2677.

  5. Positive overview is kept for now, also on support by the EMA50, taking into consideration that failing to confirm the breach lower will press on the price to rebound bearishly and decline to visit 1.2479 areas before detecting the next destination.