INTRADAY TECHNICAL ANALYSIS 27 MAY (observation as of 08:45 UTC)


Important Levels to Watch for:

-        Resistance line of 1.07770 and 1.08459.

-        Support line of 1.06392 and 1.05703.

Commentary/ Reason:

  1. The euro rising to its highest since April 25 against the dollar earlier today and was last at $1.07341. The pair is also heading for 1.46% weekly gains.

  2. EUR/USD rallied moderately on a higher German bund yields that supported the euro, after the 10-year German bund yield rose +4.6 bp to 0.998%.  the EUR/USD also garnered support from Thursday’s Eurozone data that showed Italian consumer confidence unexpectedly increased.

  3. The dollar meanwhile posted moderate losses after a sharp rally in stocks curbed liquidity demand for the dollar.

  4. Investors also took comfort from Federal Reserve minutes suggesting it could pause its rapid rate hikes later this year.

  5. The EUR/USD pair resumed its positive trading strongly to reach waited target at 1.0777, getting continuous positive support by the EMA50 that reinforces the chances of surpassing the mentioned level to open the way to achieve additional gains that reach 1.0845. Therefore, we expect to witness more rise in the upcoming sessions, noting that failing to achieve the required breach will press on the price to test 1.0640 areas before any new attempt to rise.




Important Levels to Watch for:

-        Resistance line of 0.96499 and 0.96997.

-        Support line of 0.95503 and 0.95005.

Commentary/ Reason:

  1. The dollar remains weighed against the Swiss franc, to record a new 1-month low.

  2. It marginally slipped to 0.95822 and heading for 1.65% weekly losses.

  3. A risk-on market mood keeps the greenback on the defensive.

  4. The USD/CHF appears to found its feet after dropping from YTD highs at 1.0000. For two consecutive days, the major has been trading within the 0.9573-0.9642 band, unable to break above/below the range, despite some US economic data that investors ignored.

  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, and the way is open to achieve our waited target at 0.9550, noting that breaking this level will extend the bearish wave to target 0.9500 as the next negative station.

  6. Bearish trend scenario will remain active unless breaching 0.9650 and holding above it.




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 flat to 127.082 yen, en route to 0.65% weekly decline.

  2. With U.S. inflation expectations have been coming off, hence fading expectations for Fed tightening has weighed on the USD/JPY, which the yen is quite sensitive to yield differentials

  3. Minutes from the Fed's May meeting, released Wednesday, showed that most participants believed 50 basis-point hikes would be appropriate at the June and July policy meetings, but many thought big, early hikes would allow room to pause later in the year to assess the effects of that policy tightening.

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

  5. Although the divergence in monetary policy between the Federal Reserve and the Bank of Japan has been a major tailwind for the greenback. Though, the yen strengthened on comments from BoJ Governor Kuroda yesterday, who said the BoJ could manage an exit from its decades-long monetary policy and that U.S. rate rises would not necessarily keep the yen weak. 

  6. The USD/JPY pair resumes its negative trading, and the continue of the bearish trend in the upcoming sessions, and the way is open to head towards our next negative target that reaches 126.026.

  7. The bearish trend is suggested on the intraday basis unless the price rallied to breach 128.158 and hold above them.




Important Levels to Watch for:

-        Resistance line of 1.26600 and 1.27290.

-        Support line of 1.25220 and 1.24530.

Commentary/ Reason:

  1. The dollar dropped to the lowest against sterling since April 26 at $1.26658 earlier today, and now last stood at $1.26181.

  2. Sterling received a boost after British Finance Minister Rishi Sunak announced a range of measures to tackle the country’s cost-of-living crisis, including a so-called “windfall tax” on the profits of oil and gas giants.

  3. The GBP/USD pair managed to breach our previous resistance to confirm the continuation of the bullish trend domination, organized inside the bullish channel that appears on the chart, which reinforces the chances of achieving more positive targets that start at 1.2660 and extend to 1.2729.

  4. The EMA50 continues to support the suggested bullish wave, which will remain valid conditioned by the price stability above 1.2522 – 1.2453 levels.