INTRADAY TECHNICAL ANALYSIS 25 JUNE (observation as of 05:50 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.19737 and 1.19967.
- Support line of 1.18994 and 1.18765.
Commentary/ Reason:
The euro edged up 0.03% to $1.19353, pinned to trade rangebound against the dollar.
The euro posted modest gains after Thursday’s data showed optimism in the Eurozone economic outlook. The German Jun IFO business climate index rose to a 2-1/2 year high, while the French Jun business confidence rose to a 14-year high.
Although the euro were eased on dovish comments from ECB Executive Board member Schnabel who said short-term rates will stay low for a substantial period and the ECB will do everything to avoid ending support too soon.
The dollar vaulted to its highest levels since March against the euro last week after the U.S. Fed surprised markets by projecting interest rate rises sooner than expected in 2023.
The EUR/USD stalled on the rebound indicating that bullish sentiment faltering. The breakdown in the previous rally has left buyers reeling and there appears little appetite to drive another rally currently.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92085 and 0.92283.
- Support line of 0.91442 and 0.91243.
Commentary/ Reason:
The dollar was little changed against the Swiss franc, trading at 0.91764.
The dollar is alternating between losses and gains and trade rangebound in the several recent sessions as investors digested elevated U.S. inflation after hawkish Fed officials comments on Wednesday and Thursday that supported the dollar, against Fed Chair Powell which downplayed inflation risks.
Although, the dollar appears to be holding up quite well, supported by the strength in T-note yields today.
The dynamics around the U.S. dollar expected to continue to influence the pair’s performance for the time being.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.39902 and 1.40277.
- Support line of 1.38691 and 1.38317.
Commentary/ Reason:
The pound bounced from yesterday’s losses to gain against the dollar, supported by steady crude oil prices and improved risk appetite. The pound bought at $1.39276.
The British pound also made a comeback as headlines showing that tensions between the EU and the UK over the Northern Ireland Protocol are easing.
Monetary policy update of the Bank of England weighted on the pound sterling as the policymakers leaned away from flagging rate rises.
The BoE pushed back against speculation that a surge in UK inflation means it’s preparing to boost interest rates, saying the economy still needs support to recover from the pandemic. The BoE said inflation would surpass 3% as Britain's locked-down economy reopens, but the climb further above its 2% target would only be "temporary" and most policymakers favoured keeping stimulus at full throttle.
The GBP/USD pair is likely to consolidate between the 1.380 and 1.40 price levels, as an attempt at the upper bound of the range was rejected. Buying pressure remains, yet conviction isn’t currently strong enough to resume the rally. Sellers are still active, which suggest that the pair may continue to remain rangebound in the near-term.
