INTRADAY TECHNICAL ANALYSIS 13 MAY (observation as of 08:30 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.06617 and 1.05956.

-        Support line of 1.04863 and 1.04321.

Commentary/ Reason:

  1. The euro was 0.20% firmer at $1.03999, after trading lower earlier in the day and holding above its 2017 low of $1.034. It was headed for 0.15% weekly losses against the dollar.

  2. Investors are continuing to move towards safe-haven assets, as the riskier currency was under pressure after U.S. inflation were moderated less than markets had expected, keeping the Federal Reserve on course to tighten policy aggressively.

  3. The euro also remained pressed as market heeding concerns of further curtailing Russian oil imports, which could push some European nations into economic distress.

  4. The EUR/USD pair continued the strong decline yesterday to break the support line, to approaches the extended target at 1.0486. Bearish trend will remain dominant in the upcoming period.

EURUSD              

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 1.00744 and 1.01190.

-        Support line of 0.99302 and 0.98856.

Commentary/ Reason:

  1. The dollar slipped 0.26% against the Swiss franc on Friday to trade at 1.00021 franc, though still set to record for about 1.50% gains for the week.

  2. The dollar remained tightened in the grip of bulls for the past few weeks, still ahead against other havens, commodity currencies and emerging market currencies alike. Bargained stocks buying today however limits the demand for the safe-haven currency dollar. China’s COVID-19 woes also grabbed some attention, with news of Shanghai’s lockdown measures kept traders anxious.

  3. In the meantime, EU’s plans to phase out imports of Russian oil over its war in Ukraine, pressuring Europe's energy security, inflation, and growth.

  4. Intraday bias stays on the upside and further rally would be seen to next medium term projection level at 1.0074. On the downside, break of 0.9930 support will indicate short term topping, and turn bias to the downside for pull back.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 130.225 and 131.193.

-        Support line of 127.092 and 126.123.

Commentary/ Reason:                                        

  1. The dollar regained a little ground on the Japanese currency and was last at 128.801 per yen, after hitting a two-week low of 127.520 overnight.

  2. The yen finally snapped a nine-week losing streak against the greenback on weakening risk sentiment, as after falling US yields and market jitters propped up the Japanese currency. The benchmark U.S. 10-year yield was 2.8877% on Friday, slightly higher, but still down sharply from Monday's high of 3.203%.

  3. The yen remained weighed on Friday after Bank of Japan Governor Haruhiko Kuroda said earlier today that the central bank will maintain its dovish guidance on the future path of interest rates for the time being, as the COVID-19 pandemic continues to weigh on the fragile economy. Under the current forward guidance, the BOJ says it "won't hesitate to take additional easing steps," and expects short- and long-term policy interest rates to "remain at their present or lower levels."

  4. As central banks across the globe eye interest rate hikes, markets have been rife with speculation that the BoJ may also change its guidance to one with a more hawkish tilt such as by removing the reference on its readiness to ease further.

  5. the USD/JPY hint to head to regain the main bullish trend again. Breaching 1130.225 will lead the price to achieve additional gains that reach 131.193.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.23951 and 1.24570.

-        Support line of 1.21949 and 1.21330.

Commentary/ Reason:

  1. Sterling hunkered down at $1.22118, hurt after data Thursday showed Britain's economy unexpectedly shrank in March.

  2. Given last week’s BoE monetary policy report, this further consolidate the view that growth will materially slow down throughout the year, highlighting the stagflation risks that the UK economy is facing. What’s more, with the cost-of-living squeeze now more prominent, growth will take a bigger hit in Q2.

  3. Stand-off over post-Brexit trade rules for Northern Ireland also deepens. In the latest escalation of bilateral tensions, Britain this week hinted again at taking unilateral actions on a protocol that grants Northern Ireland a unique status in post-Brexit trade relations between the two sides, which has met strong objections from EU leaders, with some even warning about the possibility of a trade war.

GBPUSD