INTRADAY TECHNICAL ANALYSIS AUGUST 8 (observation as of 08:45 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.02598 and 1.03019.

-        Support line of 1.01233 and 1.00811.

Commentary/ Reason:

  1. The euro rose 0.30% at $1.02103 on Monday, amid renewed risk-on sentiment in the market.

  2. European markets advanced as investors continued to monitor corporate earnings and key economic data points, assessing the risk of recession.

  3. Limiting the gains was the news that Moody's had cut Italy's outlook to negative as Prime Minister Mario Draghi's resignation shook the country's political landscape, as well as under pressure following a blockbuster U.S. jobs report last week. The upside surprise reaffirms that a Fed dovish pivot is premature, and that the USD will be hard to beat.

  4. The EUR/USD pair moves within bullish channel that its signs appear on the chart, and the price leaned on this channel’s support line to start the attempt to rise now, accompanied by witnessing positive signals through stochastic, waiting to motivate the price to resume the bullish trend, which its main targets begin at 1.0259.

  5. Bullish trend scenario will remain valid and active unless breaking 1.0123 and holding below it.

  6. For the week ahead, US and German inflation data will be important with the major focus on the U.S. CPI.

EURUSD

              

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.96705 and 0.97132.

-        Support line of 0.95323 and 0.94896.

Commentary/ Reason:

  1. The dollar traded lower versus the Swiss francs on Monday, slipped 0.38% to buy 0.95797 francs.

  2. While the firmer U.S. employment report last week and the U.S.-China tension appears to have favoured the US dollar’s demand, traders await Swiss Unemployment Rate data for July later in the week.

  3. The USD/CHF seems to portray a cautious mood ahead of the Swiss Unemployment Rate for July. Also, likely to have challenged the pair bulls is the anxiety ahead of Wednesday’s U.S. CPI.

  4. The USD/CHF pair rallied upwards to test the key resistance 0.9670, keeping its stability below, before negative signals through stochastic waiting to motivate the price to resume the expected bearish trend for the upcoming period, which targets testing 0.9532 initially.

  5. Breaching 0.9632 and holding above it will stop the expected decline and lead the price to achieve additional gains on the intraday and short-term basis.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 136.176 and 137.315.

-        Support line of 132.490 and 131.351.

Commentary/ Reason:                                        

  1. The greenback was flat at 135.046 yen. The pair eased slightly after rose to as high as 135.571 yen earlier today, its highest since July 28, after surging 1.64% in the previous session for its biggest single-day gain since June 17.

  2. The dollar firmed against the yen, building on the strong gains made at the of last week after surprisingly strong U.S. jobs data lifted expectations for more aggressive Federal Reserve policy tightening.

  3. The USD/JPY seesaws today. The latest inaction could be linked to the cautious mood ahead of the key U.S. inflation data, as well as mixed Japanese statistics and fears surrounding the U.S.-China tension over Taiwan.

  4. Above all, the retreat in the U.S. Treasury yields seems to challenge the pair buyers of late. Yields retreat from fortnight high as traders prepare for Wednesday’s U.S. CPI. Looking forward, U.S. CPI for July is the key data to watch for this week, especially after the recent strong U.S. employment numbers. For intraday moves, Japan’s Eco Watchers Survey for July and risk catalysts may entertain the momentum traders.

  5. The USD/JPY pair rallied upwards towards 136.176 level, to activate the positive scenario on the intraday and short-term basis, noticing that the price completed forming double bottom pattern that supports the chances of achieving gains to extend to 137.315.

  6. More rise expected in the upcoming sessions, noting that breaking 132.490 will press on the price to decline again and head to visit 131.351.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.21830 and 1.22460.

-        Support line of 1.19790 and 1.19160.

Commentary/ Reason:

  1. Sterling was largely unchanged at $1.20769.

  2. The British pound dropped as low as $1.20035 on Friday, a day after the Bank of England raised interest rates by half a point, as expected, while warning of a protracted downturn. The BoE’s forecast of a recession underpins the vulnerability of the pound going forward.

  3. The UK markets fixated on the GDP release on Friday. The GDP issue is even more relevant than ever after last week’s BoE statement around a potential recession in Q4.

  4. The GBP/USD pair attempts to consolidate above key support at 1.1979, to keep the positive effect of the mentioned positive pattern active, which encourages us to suggest the bullish bias for the upcoming period, waiting to head towards 1.2183 as a first main station.

  5. Bullish trend will be expected for today, noting that breaking 1. 1979will stop the positive scenario and press on the price to return to the main bearish track again.

GBPUSD