INTRADAY TECHNICAL ANALYSIS SEPTEMBER 1 (observation as of 08:45 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.00462 and 1.00921.

-        Support line of 0.98975 and 0.98515.

Commentary/ Reason:

  1. The euro slipped 0.20%, still clinging on above parity at $1.00229, as red-hot inflation stoked interest rate expectations in Europe.

  2. Wednesday’s data showing record-high inflation in the Eurozone in August pushed European government bond yields higher, strengthening the euro’s interest rate differentials and pushing EUR/USD higher.

  3. The high inflation and gas supply, however, are still major issues in the Eurozone, keeping the downward pressure on the common currency.

  4. Russia halted gas supplies via a major pipeline to Europe on Wednesday for three days of maintenance amid fears it will not be switched back on, adding to worries of energy rationing during coming winter months in some of the region's richest countries.

  5. The energy crunch has already created a painful cost-of-living crisis for consumers and businesses and forced governments to spend billions to ease the burden.

  6. German bonds meanwhile were set for their worst month in over 30 years.

  7. The EUR/USD pair bounced bearishly after approaching the key resistance 1.0046, which keeps the bearish trend scenario active, and the price needs to break 0.9897 to ease the mission of heading towards the next negative target at 0.9851.

  8. The bearish overview also supported by stochastic negativity conditioned by the price stability below 1.0046.

  9. Germany will publish July Retail Sales on Thursday, while S&P Global will release the final August Manufacturing PMI for the EU and the US.

EURUSD

              

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.98187 and 0.98494.

-        Support line of 0.97193 and 0.96886.

Commentary/ Reason:

  1. The dollar slipped against the Swiss franc on Thursday, shedding 0.32% to 0.97468 franc after recording a fresh six-week high earlier in the day.

  2. The flight to safety has helped put a fresh bid under the safe haven Swiss franc.

  3. The USD/CHF also eased ahead of the release of Swiss CPI figures on Thursday and Friday’s US Nonfarm Payrolls.

  4. The USD/CHF pair still on track on its positive trading, and the way is open to head towards the waited target at 0.9818.

  5. Bullish trend scenario will remain valid and active for the upcoming period supported by the EMA50, noting that the continuation of the bullish wave depends on the price stability above 0.9719.

  6. The rebound in the U.S. Treasury yields amid the revival of hopes for aggressive Fed tightening meanwhile keep the renewed buying around the dollar.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 139.851 and 141.273.

-        Support line of 137.007 and 135.585.

Commentary/ Reason:                                        

  1. The dollar rose against the yen, as investors braced for higher U.S. interest rates while expecting anchored Japanese rates to go nowhere anytime soon.

  2. The greenback hit a 24-year high of 139.679 against the yen in early Asia trade. It was last up 0.18% at 139.207 yen.

  3. The surge in Treasury yields heaped more pressure on the yen, prompting a warning from a Japanese government official that did little to stem the tide. Economists largely expect the BoJ to stick with its current monetary easing programme until Kuroda’s term expires in April even if it causes further weakness in the yen.

  4. The USD/JPY pair provided new positive trades to support the chances of continuing the bullish trend in the upcoming sessions, on its way to test 139.851 as a next main target.

  5. More rises are awaited on the intraday and short-term basis, taking into consideration that holding above 137.007 is important to continue the suggested bullish wave.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.17310 and 1.18260.

-        Support line of 1.15410 and 1.14460.

Commentary/ Reason:

  1. The surging dollar pinned sterling, falling to a new 2-1/2 year low of $1.15677 earlier today as clouds gathered over the British economy. The pound lost 4.6% in August, its steepest monthly decline since October 2016.

  2. It was last traded at $1.15944.

  3. The outlook of soaring inflation threatened to hurt the pound's purchasing power and further hurt the British economy.

  4. The latest data showed that inflation in the UK picked up to a fresh 40-year high of 10.1% in July. Financial markets expect the BoE to raise its main rate by 50bps to 2.25% at its September meeting, which would be the seventh consecutive rate hike and push borrowing costs to the highest since 2008.

  5. Political uncertainty ahead of a new prime minister to be chosen also weighed on the pound.

  6. The GBP/USD pair is on the bearish trend domination on the intraday and short-term basis, waiting to visit 1.1541 as the next target.

  7. The EMA50 continues to support the suggested bearish wave, which will remain valid unless breaching 1.1731 and hold above it.

GBPUSD