[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.19308 and 1.19653.
- Support line of 1.18190 and 1.17845.
Commentary/ Reason:
The euro was 0.22% lower at $1.18756 after bouncing off a 3 1/2-month low of $1.18357 on Tuesday.
The safe-haven dollar has closely tracked a surge in Treasury yields in recent weeks, both because higher yields increase the currency’s appeal and as the bond rout shook investor confidence, spurring demand for the safest assets.
The benchmark 10-year Treasury yield stabilised around 1.54% on Wednesday in Asia after a three-day drop from a one-year high of 1.6250%.
All eyes will be on the U.S. Federal Reserve’s 2-day meeting next week, although expectations are low that the central bank will announce major policy changes after Chair Jerome Powell last week did not express concern about the rise in bond yields.
While the U.S. Federal Reserve has downplayed the rise in yields so far, the ECB will discuss on Thursday the merits of intervening.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.93748 and 0.94158.
- Support line of 0.92418 and 0.92007.
Commentary/ Reason:
The dollar scaled back after slumped almost 1% on Tuesday. The USD/CHF last stood at 0.9301.
The bout of higher U.S. bond yields undermined low-yielding currencies, including the safe-haven Swiss franc.
Fiscal stimulus also fuelled market expectations for a rapid recovery, with President Joe Biden close to passing a $1.9 trillion spending package.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.39489 and 1.39970.
- Support line of 1.37931 and 1.37450.
Commentary/ Reason:
The British pound slipped 0.15% to $1.3865 on Wednesday.
The U.S. dollar had track higher with rising yields more recently and that trend may continue as the outlook for the U.S. economy brightens. Economic data in the U.S. also has been consistently beating expectations to the upsides.
The dollar garnered support from a higher T-note yields, and as the Congress passed of the $1.9 trillion pandemic relief package.
UK’s GPD figures and other economic indicators on Friday is awaited to direct the pound’s path ahead.
