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 was struggling at $0.99327, and not far from last week's two-decade trough of $0.99007.

  2. The bleak euro area economic outlook amid the deepening gas crisis continues to weigh down on the euro.

  3. The euro has struggled with investors more focused on an energy crisis in the bloc. Fears over a complete shutdown of Russian gas are going to keep the pair heavy and below parity, despite the potential for a hike that big at the ECB’s September policy meeting,

  4. Russian state energy giant Gazprom is expected to halt natural gas supplies to Europe via its main pipeline from Aug 31 to Sept 2 for maintenance.

  5. Unrelenting US dollar demand across the board also keep the pressure. Hawkish Fed Chair Jerome Powell combined with rising expectations of a super-sized Fed rate hike in September have unnerved investors and triggered a wave of risk-aversion.

  6. With a data-empty EU docket ahead, attention turns towards the speech from the Fed official Lael Brainard and the sentiment on global stocks for fresh trading opportunities in the pair.

  7. Looking at the chart, latest uptick seems like a breather for sellers, which will be seen as a good selling opportunity ahead. The bearish bias remains intact in the near term, supported by the downside break of the upward-sloping trendline support at 0.9897. All eyes now remain on a break of the level, as the 14-day RSI remains bearish.




Important Levels to Watch for:

-        Resistance line of 0.96928 and 0.97276.

-        Support line of 0.95802 and 0.95454.

Commentary/ Reason:

  1. The dollar rose against the Swiss franc, added 0.35% to 0.96908 franc on Monday.

  2. The US dollar rallied after Powell reaffirmed that the Fed would raise rates as high as needed.

  3. The flight to safety has helped put a fresh bid under the greenback.

  4. Further, the rebound in the US Treasury yields amid the revival of hopes for aggressive Fed tightening has also collaborated with the renewed buying around the dollar.

  5. The USD/CHF pair to resume the positive trades and returns to the bullish channel that appears on the chart, on its way to achieve positive targets that start by testing 0.9692 and extend to 0.9727 on the short-term basis.

  6. The EMA50 supports the expected bullish wave, which will remain valid unless breaking 0.9580 and holding below it.




Important Levels to Watch for Today:

-        Resistance line of 138.794 and 140.354.

-        Support line of 135.674 and 134.114.

Commentary/ Reason:                                        

  1. The dollar gained 0.88% to a five-week peak on the yen at 138.705 yen, with bulls looking to re-test its July top of 139.387.

  2. The yen fell, after Powell warned against prematurely loosening policy in his speech at the Federal Reserve Bank of Kansas City’s Jackson Hole, Wyoming, retreat last Friday. With other key central bankers, Powell emphasised his strong resolve to fight inflation, while Kuroda made it clear he’s sticking with monetary easing.

  3. No immediate action is expected from the BoJ, with Kuroda last month clearly denying the possibility of changing policy just to stop the currency’s fall.

  4. The remarks increased selling pressure on the yen, with more expectations for a wider interest-rate differential between Japan and the U.S. to continue for longer. The development reversed a budding market view in the past few weeks that a slowdown in the pace of U.S. rate hikes would stop the yen’s weakening trend.

  5. The USD/JPY pair found solid support at 135.674, to trade with strong positivity and resume the main bullish trend, to open the way to achieve additional gains that start by testing at 138.794.

  6. Bullish bias will be suggested for today, supported by the EMA50 that carries the price from below, noting that breaking 135.674 will stop the expected rise and put the price under negative pressure on the intraday basis.




Important Levels to Watch for:

-        Resistance line of 1.19587 and 1.21257.

-        Support line of 1.16247 and 1.14577.

Commentary/ Reason:

  1. The GBP/USD continued Friday's decline to sank to a 2-1/2-year low of $1.16605 on Monday, amid an extension of risk-off sentiment and the U.S. dollar recovery.

  2. The outlook of soaring inflation threatened to hurt the pound's purchasing power and further hurt the British economy. Economists forecasted inflation to surge to 18.6% by the start of 2023 due to soaring wholesale gas prices. The latest data showed that inflation in the UK picked up to a fresh 40-year high of 10.1% in July.

  3. 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.

  4. Political uncertainty ahead of a new prime minister to be chosen next month.

  5. The GBP/USD downwards strongly to resume the main bearish trend, approaching the bearish channel’s support line at 1.1624, and continuation of the bearish bias to visit below 1.1500 areas in the upcoming sessions.