INTRADAY TECHNICAL ANALYSIS 9 AUGUST (observation as of 06:50 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.17698 and 1.17898.
- Support line of 1.17298 and 1.17098.
Commentary/ Reason:
The greenback strengthened as far as $1.17422 to the single currency, extending a 0.6% pop from Friday, and lifted to a 4-month high when a strong U.S. jobs report stoked bets that a reduction in asset purchases could start this year and higher interest rates could follow as soon as 2022.
The dollar pared back its earlier gains and afloat at $1.17624 as it heads to European opening.
The dollar could climb further versus the euro should U.S. yields continue to tick higher.
The German trade balance and economic sentiment expected to be released later this week, which will allow traders to gauge the market’s sentiment.
The EUR/USD price is attempting to gain some ground after posting multi-month lows. However, the attempt will only be a corrective wave that may not be able to overcome the 1.1800 hurdle. It means any upside will be a dead cat bounce and a strong selling opportunity.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.91790 and 0.92062.
- Support line of 0.91246 and 0.90974.
Commentary/ Reason:
The dollar climbed against the Swiss franc on Monday, reaching a 1-week high against to trade at 0.91481.
A hawkish remark by the Fed official of rates tightening helped pushed the dollar higher, as traders positioned for an earlier tapering of Federal Reserve stimulus on the back of strong nonfarm payrolls data on Friday.
The Swiss franc meanwhile holding on as a safe haven currency, as nerves about the spread of the Delta coronavirus variant keep a degree of caution in currency markets prompted traders to wind back bets on a strong economic recovery.
The USD/CHF is continuing to climb away from the 0.909 support line although currently, bullish momentum has started to weakening.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.38913 and 1.39153.
- Support line of 1.38433 and 1.38193.
Commentary/ Reason:
The British pound rose 0.14% to $1.38818 on Monday.
The pair has rocked and rolled in response to the BoE and nonfarm payrolls last week.
The pound jumped as the Bank of England signalled concerns about inflation. In its policy meeting, the BoE left policy settings untouched but outlined a path to tapering and tightening over years to come.
The pound also benefited from an upgrade to Markit's Services PMI for July and enjoys an advantage over the U.S. when confronting the Delta COVID-19 variant. Cases in Britain maintain their downward trajectory while they are relentlessly rising in America. Moreover, the UK population is vaccinated at higher rates than those in the US.
Even so, the higher yield on the 10-year U.S. Treasury notes meanwhile lending support for the greenback for the day.
The GBP/USD pair is floating along just below the 1.390 price level on the short-term basis, as several break attempts have contained price action within the current trading range. Selling activity has risen on each break attempt indicating some bearish bias in the pair.
