INTRADAY TECHNICAL ANALYSIS 3 JUNE (observation as of 05:20 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.22391 and 1.22637.
- Support line of 1.21594 and 1.21347.
Commentary/ Reason:
Against the dollar, the euro traded at $1.22030 after unwinding a small Wednesday slump.
The euro traded modestly lower on Thursday on a weaker-than-expected German retail sales data that undercut bund yields and put pressure on EUR/USD. The weak retail sales data pushed the 10-year German bund yield down to a 3-session low of -0.196%, weakening the euro’s interest rate differentials.
Limiting losses in EUR/USD is the concerns about rising price pressures in the Eurozone, which is hawkish for ECB policy. Eurozone Apr PPI data on Wednesday rose to its largest increase in 12-1/2 years.
The prospect of EU’s economic reopening also widens as EU countries gradually to lift travel restrictions for several countries including the latest is Japan.
U.S. private payrolls figures due later today are the latest numbers to offer clues on the state of the U.S. economy and a possible read on broader non-farm payrolls data due on Friday. Appearances by a handful of Federal Reserve officials will also be closely watched for hints of sensitivity to the early strength of the rebound ahead of their next meeting in mid-June.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.90282 and 0.90525.
- Support line of 0.89498 and 0.89255.
Commentary/ Reason:
The dollar rose fractionally higher against the Swiss franc on Wednesday, added 0.09% to trade at 0.89855.
The pair was little changed and trading in rangebound as traders awaited on more economic data for the day to gauge for the next inflation trajectory.
Although yield differentials seem to be moving in the dollar’s favour and that policymakers’ tone is subtly shifting.
The dollar was positioned to be more advantageous and supported as investors returned to safe-haven currencies due to cautious sentiment on the global market.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.41997 and 1.42280.
- Support line of 1.41083 and 1.40800.
Commentary/ Reason:
Sterling was flat at $1.41583 on Thursday after easing off a 3-year high of $1.42472 reached Tuesday.
The British pound has initially fallen during the trading session on Wednesday only to turn around and show signs of life again. Ultimately, this is a market that continues to look as if it is going to pressure this 1.42 handle, which is a very significant level. If the pair can break above there cleanly, then it is likely that the market goes looking towards 1.45 handle.
The UK recently gets green light to start talks on joining Trans-Pacific Partnership (CPTPP). The decision marks another step in Britain's efforts to pivot away from Europe, build global influence and form new trading links with faster growing economies following its exit from the EU at the end of 2020.
Another driving points for the pound also as traders bet the U.K.’s economic recovery will gain traction with the rollout of coronavirus vaccines. The progress of vaccination puts the U.K. closer and faster to economic normalization than other countries.
