INTRADAY TECHNICAL ANALYSIS 13 JANUARY (observation as of 07:00 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.14765 and 1.15146.
- Support line of 1.13532 and 1.13150.
Commentary/ Reason:
A struggling dollar put the euro at $1.14417, near a two-month high of $1.14525 it touched overnight.
The dollar sold off against the euro after a lower T-note yields Wednesday pressured the dollar following the U.S. December consumer prices that came in near expectations.
The dollar also sank further Wednesday after the Fed Beige Book on Wednesday said that U.S. economic optimism showed signs of cooling.
The broad dollar weakness supported EUR/USD along with signs of strength in Eurozone industrial activity. Eurozone Nov industrial production were showed rose +2.3% m/m, stronger than expectations of +0.2% m/m and the biggest increase in a year.
The EUR/USD breaks out of established range since yesterday and hits high. Intraday bias is now on the upside and the next target is the 1.147 resistance line and buyers’ appetite will need to be strong to maintain the break. If it can sustain gains at this level, a bullish continuation could be extended in the next sessions.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92443 and 0.92902.
- Support line of 0.90956 and 0.90496.
Commentary/ Reason:
The dollar was flat on Thursday, traded at 0.91462 franc, hovering just above the 1-week low it reached overnight.
The Swiss franc gained ground, supported by a pullback in Treasury yields amid eased concerns of accelerated monetary policy tightening by the Federal Reserve after December’s US inflation rate was in line with expectations.
The USD/CHF plummeted, as a sharp rise in selling activity in the last two trading sessions reversed the most recent rally attempt. Given the steady RSI and a lack of decisive momentum signals from MACD, the USD/CHF prices are likely to remain pressured until the immediate hurdle.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 115.540 and 115.979
- Support line of 114.120 and 113.681.
Commentary/ Reason:
The Japanese yen traded at 114.610 per dollar, as it strengthened from levels above 115 in the previous sessions, a more than 2-week low.
The pair was flat on Thursday, as investors were on risk-on mood. The lower T-note yields also were supportive of the yen.
The USD/JPY pair has broken the trendline in the first indication of a change in sentiment. If the break is sustained it could signal a longer-term bearish trend for the pair. A decline of the currency exchange rate could eventually reach the next support line is the 114.120 price level. Deeper fall would then be seen to 113.68 support.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.37393 and 1.37760.
- Support line of 1.36207 and 1.35840.
Commentary/ Reason:
Sterling extended its gains against the U.S. dollar on Thursday, stood at $1.37131.
The prospect of rate hikes by the Bank of England boosted sterling, leapt to its highest in more than two months against the dollar.
While the U.S. CPI data pointed to the highest inflation rate in 39 years, putting the Fed under pressure to start raising interest rates.
Sterling also had been rallying as traders reckon Britain's economy can survive a surge in Omicron COVID-19 cases.
Investors continue to monitor signs of a slowing economic recovery, mounting inflationary pressure, record rises in COVID-19 cases and post-Brexit tensions over the Northern Ireland protocol.
The GBP/USD pair continues to climb after a break of the previous resistance line. Bullish conviction has been strong with buyers dominating since mid-December and the 1.373-77 price ceiling remains in sight. Though indicators signal that the pair has reached overbought conditions, therefore a reversal may be on the cards.
