INTRADAY TECHNICAL ANALYSIS AUGUST 9 (observation as of 06:40 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.02598 and 1.03019.
- Support line of 1.01233 and 1.00811.
Commentary/ Reason:
The euro rose slightly to $1.01972, unable to mount a significant recovery amid a lack of positive fundamentals.
Europe’s energy crisis, regional economic weakness, and the ECB’s reluctance to hike rates aggressively have created headwinds for the common currency, limiting its upside performance against the greenback.
The dollar meanwhile saw some safe-haven demand on continued Taiwan tensions after China’s military Monday announced new military exercises around Taiwan, though the retreat in the U.S. Treasury yields seems to challenge.
The EUR/USD pair continues to trade rangebound, moving within the bullish channel that supports the chances of continuing the expected bullish wave for the upcoming period, to test 1.0259 initially, and to push the price to 1.0301 as next main stations.
In general, the bullish trend scenario will remain active unless breaking 1.0123 and holding below it.
For the week ahead, US and German inflation data will be important with the major focus on the U.S. CPI.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.96705 and 0.97132.
- Support line of 0.95323 and 0.94896.
Commentary/ Reason:
The dollar remains depressed around 0.95465 on a Tuesday’s sluggish session, remain weighed around the 1-week low touched overnight.
While the firmer U.S. employment report last week and the U.S.-China tension appears to have favoured the US dollar’s demand, traders await Swiss Unemployment Rate data for July later in the week.
The USD/CHF seems to portray a cautious mood ahead of the Swiss Unemployment Rate for July. Also, likely to have challenged the pair bulls is the anxiety ahead of Wednesday’s U.S. CPI.
The U.S. dollar also weakens amid a retreat in the U.S. yields.
The USD/CHF pair waiting to get negative motive that assists to push the price to break 0.9532 level and extend the bearish wave to target 0.9489 areas on the near-term basis, around its 3-months low.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 136.176 and 137.315.
- Support line of 132.490 and 131.351.
Commentary/ Reason:
The dollar traded 0.10% higher at 135.069 yen during the early part of the European Tuesday’s session, surrendering its modest intraday gains to over a one-week high set on Monday after last week’s strong U.S. jobs report.
Retreating U.S. Treasury bond yields keep the U.S. dollar bulls on the defensive, which, in turn, acts as a headwind for spot prices.
Though, a big divergence in the monetary policy stance adopted by the Bank of Japan and the Federal Reserve helps limit deeper losses for the USD/JPY pair.
Traders adopted cautious mood ahead of the key U.S. inflation data, as well as mixed Japanese statistics and fears surrounding the U.S.-China tension over Taiwan.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.21830 and 1.22460.
- Support line of 1.19790 and 1.19160.
Commentary/ Reason:
Sterling held at $1.20813 on Tuesday, was largely unchanged.
The British pound dropped as low as $1.20035 on Friday, a day after the Bank of England raised interest rates by half a point, as expected, while warning of a protracted downturn. The BoE’s forecast of a recession underpins the vulnerability of the pound going forward.
The UK markets fixated on the GDP release on Friday. The GDP issue is even more relevant than ever after last week’s BoE statement around a potential recession in Q4.
The GBP/USD pair finds difficulty to surpass the EMA50, to fluctuate and waiting to motivate the price to resume the positive trades to surpass the EMA50 and ease the mission of rallying towards first positive target at 1.2183. Bullish overview is kept unless breaking 1.1979 and holding below it.
