INTRADAY TECHNICAL ANALYSIS AUGUST 15 (observation as of 08:30 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.03925 and 1.04561.

-        Support line of 1.01864 and 1.01227.

Commentary/ Reason:

  1. The euro started the new week on a bearish note amid a souring market mood.

  2. The pair eased 0.23% to $1.02341, weighed down by Europe's struggles with the war in Ukraine, the hunt for non-Russian energy sources and a hit to the German economy from scant rainfall.

  3. Meanwhile the greenback edged higher as traders continued to weigh data that has raised the possibility that U.S. inflation may be peaking against Federal Reserve policymakers' hawkish comments.

  4. Markets also remain risk-averse on Monday as U.S.-China geopolitical tensions continue to escalate following US lawmakers' visit to Taiwan over the weekend.

  5. The EUR/USD pair expected to continue the bearish trend domination, opening the way to achieve negative targets that start at 1.01864 and extend to 1.0122 after breaking the previous level, taking into consideration that breaching 1.0392 will stop the expected decline and lead the price to recover again.

EURUSD

              

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.95475 and 0.96053.

-        Support line of 0.93605 and 0.93027.

Commentary/ Reason:

  1. The dollar rose 0.30% at 0.94394 franc on Monday, though remains struggling around the 3-month low touched in the last week.

  2. Dollar struggles to regain inflation-induced losses, after the U.S. inflation data last week sending the dollar tumbling.

  3. Although the inflation data in July eased consumer pressure, the underlying inflation pressure in the U.S. is still very high. Federal Reserve officials eased market expectations for a substantial relaxation of its tightening policy, and investors were cautious about expectations for a sharp weakening of the dollar in the market outlook.

  4. The USD/CHF pair remains rangebound, noticing that stochastic gets the positive momentum again, waiting to motivate the price to provide positive trades that target 0.9547 level mainly. Bullish trend scenario will remain active unless breaking 0.9360 and holding below it.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 135.420 and 136.671.

-        Support line of 131.372 and 130.121.

Commentary/ Reason:                                        

  1. Against the yen, the dollar steadied at 133.410 yen after losing 1% last week.

  2. The pair remains volatile within a familiar trading range, as performance across the equity markets keep a lid on any further gains for the safe-havens.

  3. The latest upswing in the major could be attributed to a fresh leg up in the US dollar across its major peers after disappointing Chinese Retail Sales, Industrial Output and Fixed Asset Investment data missed expectations and spooked investors’ sentiment.

  4. The U.S. Treasury yields also trade sluggishly, offering little impetus to bulls, as investors also remain wary about the latest unexpected rate cuts by the PBOC.

  5. The USD/JPY pair targeting visiting 135.420 level initially. Stochastic gathers the positive momentum clearly to support the expectations to rise, with breaking 131.372 and holding below it will stop the suggested positive scenario and lead the price to return to the correctional bearish track again.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.23167 and 1.23977.

-        Support line of 1.20547 and 1.19737.

Commentary/ Reason:

  1. Sterling slipped 0.32% to $1.20942.

  2. The dollar staged a solid comeback, as dollar bulls tracked the rebound in the U.S. Treasury yields across the curve. The end-of-the-week flows also helped the greenback to recover after falling hard earlier in the week on expectations of shallower Fed tightening amid soft inflation.

  3. UK political uncertainty continues to remain a drag on the pound, despite the less-than-expected contraction of the Q2 GDP.

  4. Escalating geopolitical tensions between the U.S. and China combined with weak data releases from China also seem to be weighing on risk sentiment on Monday.

  5. Looking forward, the UK labour and inflation data later this week will be closely examined for the next BoE rate hike path while the Fed July meeting’s minutes could steal the limelight on Wednesday.

  6. The GBP/USD pair waiting to motivate ethe price to rebound bullishly and resume the main bullish trend, noting that the positive targets begin at 1.2316 and extend to 1.2400, noting that breaking 1.2054 followed by 1.1973 levels will stop the expected rise and press on the price to turn to decline.

GBPUSD