INTRADAY TECHNICAL ANALYSIS 28 JULY (observation as of 05:30 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.18550 and 1.18830.
- Support line of 1.17645 and 1.17366.
Commentary/ Reason:
The euro against the dollar were barely unchanged from the opening Wednesday, with the euro last trading at $1.18153.
The EUR/USD pair advanced to 1.18408 overnight, its highest for the week. The dollar declined in anticipation of the U.S. Fed monetary policy announcement. The greenback fell despite increased demand for safety, which resulted in falling equities and easing government bond yields.
The markets are waiting to see whether there are more clues this month on the timing of tapering as policymakers face spiking U.S. inflation. Hints of a faster end to extraordinary policy support could lift U.S. rates and the dollar, while a dovish-sounding Fed might put pressure on the greenback. The Fed publishes a statement at 1800 GMT followed by a news conference at 1830 GMT.
The EUR/USD is fluctuating and floating back towards the support level as buyers appear to lack the appetite to facilitate a rally. Its resilience will be tested later today by the FOMC announcement, which dominates the currency market calendar ahead of Friday's much-anticipated Eurozone GDP data for the quarter.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.91901 and 0.92140.
- Support line of 0.91129 and 0.90890.
Commentary/ Reason:
The Swiss franc edged lower against the dollar, down 0.10% to trade at 0.91516.
After recording a 1-week high overnight, the franc pulled back against the U.S. dollar today, following a mixed signals from U.S. macro data that continued to support the greenback.
Investors are now awaiting any signal from the Fed to break the uncertainty, one way or the other. The dollar is expected to strengthen this week on the possibility of the Fed moving a step closer to tapering at the conclusion of its two-day policy meeting on Wednesday.
USD/CHF hovers in a broader trading range of 0.9150 and 0.9275 for the past one month. If price breaks the session’s low, it could breach to test the 0.911 support level and June 17 low at 0.908.
Alternatively, if the pair reverses direction, the first target for USD/CHF bulls could be the 0.919 resistance level, followed by the July 21 high around 0.921.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.39273 and 1.39770.
- Support line of 1.37667 and 1.37117.
Commentary/ Reason:
Sterling jumped to a 1-week high overnight of $1.38935, before pared the gains to $1.38672 on Wednesday.
The sterling was buoyed by the recovery in risk sentiment, as traders cheered reports that Britain was considering opening borders as a signal of further re-opening benefits to come, and a growth upgrade from the IMF.
Focus remains on 1.392 resistance in GBP/USD. Bias will be turned back to the upside for retesting this high. On the downside, below 1.3766 minor support will turn bias for further downside.
