INTRADAY TECHNICAL ANALYSIS 20 JUNE (observation as of 09:15 UTC)


Important Levels to Watch for:

-        Resistance line of 1.05729 and 1.06173.

-        Support line of 1.04293 and 1.03849.

Commentary/ Reason:

  1. The euro strengthened 0.45% to $1.05401, staying well within its recent range.

  2. The euro gained despite French President Emmanuel Macron losing an absolute majority in the country's parliamentary election over the weekend - a major setback that could throw the country into political paralysis.

  3. The dollar drift lower, being driven mostly by thin trading with the U.S. observing a public holiday on Monday.

  4. Markets are still concerned about aggressive monetary tightening by the Fed, which is keeping U.S. yields elevated, and supporting the dollar.

  5. The EUR/USD pair found solid support base at 1.0429, to rebound bullishly and start building bullish wave on the intraday basis, paving the way to return to the correctional bullish track, targeting testing 1.0572 initially, which breaching it represents the gate to rally towards 1.0617 as a next positive target.




Important Levels to Watch for:

-        Resistance line of 0.97530 and 0.97963.

-        Support line of 0.96131 and 0.95699.

Commentary/ Reason:

  1. The dollar lost 0.54% to 0.96429 Swiss franc on Monday.

  2. The Swiss franc's leapt higher after the Swiss National Bank surprised investors last week by raising interest rates for the first time in 15 years by 50 basis points.

  3. The USD/CHF pair has sharply declined, retreating from the monthly maximum of 1.0050 reached on Tuesday. The USD/CHF pair approached the first waited positive target at 0.9613 before retreated and found solid resistance there, to decline again and head to achieve negative targets that we expect to start at 0.9613 and extend to 0.9570 after breaking the previous level.

  4. Stochastic provides negative signals that support the expected decline, which will remain valid unless the price rallied to breach 0. 9613 and hold above it.




Important Levels to Watch for Today:

-        Resistance line of 136.194 and 137.434.

-        Support line of 132.182 and 130.942.

Commentary/ Reason:                                        

  1. The yen rose 0.13% against the dollar to 134.692 but remained under broad pressure as the Bank of Japan stuck doggedly to its super-easy policies even as all its developed world peers took steps to tighten.

  2. The dollar remained elevated, having reached its highest since 1998 last Wednesday.

  3. The drift lower in the dollar is being driven mostly by thin trading with the U.S. observing a public holiday on Monday.

  4. The BOJ on Friday bucked a wave of tightening that included the Fed, Bank of England and even a shock half-point hike from the Swiss National Bank. It also resisted attacks from bond market speculators testing the monetary authority's commitment to its 25-basis point tolerance band around the zero percent target for the 10-year Japanese government bond yield.

  5. By contrast, the Fed followed a 75 basis-point rate hike mid-week by stating in its twice-yearly monetary policy report to Congress on Friday its "unconditional" commitment to fighting inflation, despite rising risks of recession.

  6. The USD/JPY pair rallied upwards strongly on last Friday to reach few pips away from our first main waited target at 136.194, while negative trades in the upcoming sessions targeting testing 132.182 mainly. Stochastic negativity supports the expected decline, noting that breaching 132.182 will stop the negative scenario and lead the price to continue the rise and head to visit 136.194 barrier initially.




Important Levels to Watch for:

-        Resistance line of 1.24926 and 1.26320.

-        Support line of 1.20414 and 1.19020.

Commentary/ Reason:

  1. Sterling ticked up 0.30% to $1.22558.

  2. The rate rises last week prompted gilts to sell and sterling to rise on bets that future hikes would come thick and fast.

  3. The UK central bank delivered a quarter-point rate increase on Thursday - a third the size the U.S. Fed pushed through the night before. BoE policymakers also signalled they will move “forcefully” in the future if needed.

  4. Volatility seems likely this week with UK inflation figures expected to show another alarmingly high reading that could push the Bank of England into hiking at a faster pace.

  5. The bullish overview remained on the pound sterling unless breaking 1.2041 and holding below it, with current main target reaches 1.2492.