INTRADAY TECHNICAL ANALYSIS 17 JUNE (observation as of 05:30 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.21310 and 1.21883.

-        Support line of 1.19456 and 1.18883.

Commentary/ Reason:

  1. The euro was down to an almost 2-month low of $1.19982 per dollar on Thursday, extending in losses of 1.1% from previous session, the sharpest fall since March 2020.

  2. The dollar recovered after the FOMC Wednesday afternoon brought forward its hawkish forecast. The post-FOMC statement was bullish for the dollar as it said, "progress on vaccinations has reduced the spread of COVID-19 in the U.S., and amid this progress and strong policy support, indicators of economic activity and employment have strengthened."  The FOMC also raised its U.S. 2021 GDP forecast to 7% from 6.5% in March and raised its core PCE estimate to 3.0% from 2.2% in March.

  3. Comments from Fed Chair Powell on Wednesday sent the 10-year T-note yield up to a 1-1/2 week high of 1.589%, which strengthened the dollar’s interest rate differentials.

  4. Strength in the dollar pressured the euro along with dovish ECB comments. ECB officials on Wednesday said that it is too early to discuss the end of the ECB's pandemic bond purchase program.

  5. Wednesday’s economic data also was dovish for ECB policy and negative for EUR/USD. The Eurozone Q1 labor costs rose the smallest increase in 4 years, while the Ifo Institute on Wednesday cut its German 2021 GDP estimate to 3.3% from 3.7% due to supply chain bottlenecks.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.91238 and 0.91696.

-        Support line of 0.89754 and 0.89296.

Commentary/ Reason:

  1. The dollar steadied on Thursday after jumped to more than 1-month high against the Swiss franc on Wednesday. It was last bought at 0.89857.

  2. The dollar recovered after the FOMC Wednesday afternoon brought forward its hawkish forecast. U.S. Federal Reserve officials unnerved investors with indications that the central bank could begin rising interest rates in 2023, a year earlier than expected.

  3. Another positive factor for the dollar is an improvement in the pandemic after the 7-day average of new U.S. COVID-19 infections on Tuesday fell to a 14-1/2 month low of 13,501.

USDCHF

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.41282 and 1.41867.

-        Support line of 1.39391 and 1.38807.

Commentary/ Reason:

  1. The British pound bounced back from the lowest since May 7 earlier today to recoup some losses, and last stood at $1.39981, rose 0.12% on Thursday.

  2. A British inflation data that was unexpectedly jumped above the Bank of England's 2% target in May somehow neutralized the hawkish FOMC meeting outcome.

  3. Although, the dollar appears to be holding up quite well, supported by the strength in T-note yields today.

GBPUSD