INTRADAY TECHNICAL ANALYSIS 14 JUNE (observation as of 07:50 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.05169 and 1.05628.

-        Support line of 1.03682 and 1.03222.

Commentary/ Reason:

  1. The euro made a fresh one-month low against the dollar on Tuesday, before rebounded slightly and last stood at $1.04402.

  2. The euro was on cautious sentiment over a potential interest rate hike in the U.S., as well as the Fed’s latest quarterly forecast.

  3. The jump in yields and the anticipation of a more aggressive Fed helped make the U.S. dollar a more attractive investment. The 10-year T-note yield jumped to two-decade high.

  4. The EUR/USD pair continues to decline, reinforcing the expectations of continuing the bearish trend, and the way is open to achieve our extended target at 1.0682, noting that breaking this level will cause more decline on the short-term and medium-term basis, as the next targets reach 1.0322 areas.

  5. The bearish trend scenario will remain suggested for the upcoming period unless the price rallied to breach 1.0516 and hold above it.

  6. On the data front in Europe on Tuesday, due for release are German inflation figures for May, the U.K. unemployment rate for April, euro area industrial production data for April and Germany’s ZEW index of economic sentiment for June.

  7. Meanwhile the U.S. FOMC members will deliberate on their decision at their two-day meeting beginning Tuesday. Central banks' efforts to raise interest rates to curtail inflation will remain in focus this week.

EURUSD

              

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 1.00234 and 1.00724.

-        Support line of 0.98647 and 0.98156.

Commentary/ Reason:

  1. The dollar hit one-month high, approaching parity with the Swiss franc earlier today, before pulled 0.50% lower to 0.99254.

  2. The dollar remains elevated, buoyed by a rise in Treasury yields as expectations of a more hawkish Fed are pushing up the dollar against the safe haven currency.

  3. Central banks' efforts to raise interest rates to curtail inflation will remain in focus this week. The Federal Reserve are expected to raise rates at their meetings and there is a chance the Swiss National Bank will do the same.

  4. The Swiss National Bank will meet on Thursday, and a 25-bps increase is on the cards, while the U.S. FOMC decision is due Wednesday.

  5. The USD/CHF pair resumed the bullish rally, though affected by stochastic negativity now to show some slight bearish bias, waiting to get positive motive that assist to push the price to resume the bullish trend that its next target located at 1.00234.

  6. The EMA50 continues to support the suggested bullish wave, which will remain valid unless breaking 0.9864 and holding below it.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 135.391 and 136.003.

-        Support line of 133.411 and 132.799.

Commentary/ Reason:                                        

  1. The dollar dropped 0.08% against the yen to 134.320 but remains close to its more-than-two-decade high of 135.185 reached on Monday.

  2. Nerves about official intervention gave brief respite to the yen, but it was soon on the back foot again after the Bank of Japan expanded a round of bond purchases to knock the 10-year government bond yield back to its 0.25% cap.

  3. The USD/JPY pair faced negative pressure yesterday, before bounced bullishly to settle around the bullish channel’s support line that appears on the chart, noticing that stochastic provides positive signals that support the chances of continuing the expected bullish trend on the intraday and short-term basis, which its next targets located at 135.391 followed by 136.00.

  4. The EMA50 keeps supporting the suggested bullish wave, reminding you that it is important to hold above 133.411 to continue the suggested rise.

  5. The FOMC and BoJ decision later in the week is awaited. Analysts expect Wednesday may see the Fed go 75-bps and flag more, while the BoJ on Friday will only flag more bond buying. If this happen, the Japanese yen is not going to stay at these levels for long. It's going to get worse.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.23285 and 1.24137.

-        Support line of 1.20529 and 1.19677.

Commentary/ Reason:

  1. Sterling rebounded off the two-year low recorded on Monday, to add 0.45% and stood at $1.21841.

  2. The GBP/USD pair fluctuates around the range, with expectation to pave the way to continue the decline on the intraday and short-term basis, noting that the next targets extend to 1.2052 followed by 1.1967.

  3. The EMA50 supports the expected decline, taking into consideration that failing to surpass 1.2052 will lead the price to start recovery attempts and achieve gains that start at 1.2328 followed by 1.2413.

  4. The GBP/USD remains on the bear’s radar ahead of the monthly data dump, as well as monetary policy meetings of the Fed and the BoE. However, the immediate downside has multiple challenges and hence a corrective pullback can’t be ruled out.

  5. On the data front in UK on Tuesday, due for release is the U.K. unemployment rate for April. While the Bank of England’s Monetary Policy Committee will announce its latest interest rate decision on Thursday.

GBPUSD