INTRADAY TECHNICAL ANALYSIS 2 JULY (observation as of 05:30 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.18848 and 1.19032.
- Support line of 1.18252 and 1.18068.
Commentary/ Reason:
The euro slipped slightly at 0.03% to $1.18447 per dollar, edging toward the 3-month low of $1.18379 per dollar.
The strength in the dollar undercut the euro. The dollar saw support from a stronger-than-expected U.S. initial claims report and the 42-year high in the U.S. ISM manufacturing prices-paid index, which was hawkish for Fed policy.
The dollar also acted as a safe-haven support as concern grows that more countries will need to reimpose pandemic lockdowns as the dangerous Delta COVID-19 variant spreads throughout the world.
Signs of a tight labour market kept many investors fretting over wage-driven price pressures. Friday's payroll data is a key focus - with economists expecting an increase of 711,000 jobs, improving from May's relatively weak report of 559,000. Some reckoning on the dollar falling back into a downtrend if the jobs data passes without surprise.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92781 and 0.92928.
- Support line of 0.92303 and 0.92156.
Commentary/ Reason:
The dollar advanced for the fifth consecutive days against the Swiss franc, set to end the week with about 0.90% higher.
On Friday, the dollar added 0.1% to trade at 0.92607.
Furthermore, traders wagered that strong U.S. labour data could lift it even further. The jobs report is due at 1230 GMT and is forecast to show a solid rise of 700,000. But there is chatter about the number coming in higher and the risk that upsets the assumption that U.S. interest rates can stay at rock-bottom levels for years.
The USD/CHF has broken the 0.922 resistance area. The price level was rejected several time in the previous attempts to break. Price action will now move towards the 0.927 and 0.930 resistance lines. The question is whether bullish momentum can be sustained.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.38329 and 1.38653.
- Support line of 1.37278 and 1.36953.
Commentary/ Reason:
The dollar crept to a fresh 2-1/2-month high of $1.37715 against the British pound on Friday.
The pound came under renewed pressure after the BoE Governor Andrew Bailey said that the central bank will apply its policy tools if inflation is persistent. The dovish stance rejected the higher rates scenario in the near future. In addition to that, the IHS Markit/CIPS UK Manufacturing PMI came at 63.9 in June, below the market estimates of 64.2.
The pound also declined as investors remain concerned about the spreading Delta variant of COVID-19 and the concern of the health of the UK economy. The PM Johnson’s administration decided to extend the lockdown to later this month after recording higher coronavirus cases.
