INTRADAY TECHNICAL ANALYSIS 23 NOVEMBER (observation as of 05:50 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.13150 and 1.13765.

-        Support line of 1.11920 and 1.11305.

Commentary/ Reason:

  1. The euro was flat at $1.12306, hovering at a fresh 2021 low touched earlier today.

  2. The dovish tone coming out from the European Central Bank and arising coronavirus cases in Europe and fresh restrictions in sight weigh on the euro. Austria already entering another full lockdown with Germany considering following suit. Germany's acting Chancellor Angela Merkel told leaders of her conservative party that measures being taken to stop the spread of the coronavirus in Europe's biggest economy were insufficient and that stronger action was needed.

  3. Another bearish factor for EUR/USD was Monday’s news that the Eurozone Nov consumer confidence indicator fell -2.0 to a 7-month low of -6.8, weaker than expectations of -5.5.

  4. Speculation that the Fed will hike rates in 2022 meanwhile underpins the greenback. The greenback is managing to retain its intrinsic strength, related to speculation the U.S. Federal Reserve will hike rates at least twice next year, with the Fed fund futures indicating a possible first hike in July 2022 and another before year-end.

  5. The EUR/USD continues to push lower as sellers have dominated majority days of the last two weeks trading sessions. The question is will the recent move last? Momentum indicators suggest that the pair is oversold and therefore a reversal may be imminent, though buying sentiment was insufficient to sustain the move.

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[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.93326 and 0.93639.

-        Support line of 0.92312 and 0.91999.

Commentary/ Reason:

  1. The Swiss franc extended its downtrend against the U.S. dollar to open lower on Tuesday, as strong demand for the greenback continued to uplift the currency to a new one-month high.

  2. The dollar was slightly higher against the franc, to trade at 0.93249.

  3. The greenback received a further boost post-Powell renomination as it leaves room for markets to flirt with the idea of a faster taper.

  4. On the other hand, the franc holds on to its safe-haven appeal, as investors see the currency as a safe haven investment amid market uncertainties due to rising COVID-19 cases in Europe.

  5. The USD/CHF has continued to climb towards the upper bound of the range at the 0.933 price line. The steady rally was supported, as most of recent trading sessions have been dominated by buying activity.

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[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 115.181 and 115.553.

-        Support line of 113.980 and 113.609.

Commentary/ Reason:                                        

  1. The greenback reached a new 4-1/2-year top versus the yen on Tuesday, after Federal Reserve Chair Jerome Powell was reappointed for a second term, emboldening bets on higher U.S. interest rates. U.S. President Joe Biden chose Powell over the other leading candidate Lael Brainard, who markets consider to be the more dovish of the two, though Brainard will be Fed vice chair.

  2. The dollar rose 0.17% against fellow safe haven the yen, changing hands at 115.061 yen per dollar, looking to breakout of its range over the past week and a half.

  3. A jump in T-note yields on the day put pressure on the yen.

  4. The greenback also takes advantage of the prevalent risk-off market profile, courtesy of the concerns about European COVID-19 curbs.

  5. Meanwhile, investors digest the latest comments from Japan on a potential oil reserves release. The broader market sentiment is expected to lead the way going forward.

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[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.34770 and 1.35440.

-        Support line of 1.33430 and 1.32760.

Commentary/ Reason:

  1. Sterling was soft versus the rampant dollar with one pound at $1.33853. The pair traded in a narrow range of its one-week low touched overnight.

  2. Traders were in doubts whether the Bank of England will raise interest rates at its December meeting. Governor Andrew Bailey said on Sunday his concern on the inflation outlook is that it could be "elevated for longer" while the risks to growth and inflation were 'two-sided', taking a more careful tone compared than his remarks earlier about the likelihood that policy will tighten soon.

  3. Investors also will keep a close eye on headlines surrounding the negotiations on Brexit's Northern Ireland (NI) protocol.

  4. Concerns over unemployment levels after the end of the furlough scheme, as well as rising COVID-19 cases, also posed some risks.

  5. The GBP/USD pair has pulled back once again to the 1.334 support level, as sellers have once again returned to thwart any bullish moves. Oscillations continue downward and are narrowing. There appears to be weak appetite from buyers and a longer-term downtrend is well-established. 

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