INTRADAY TECHNICAL ANALYSIS 22 JUNE (observation as of 05:35 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.18865 and 1.19034.
- Support line of 1.18527 and 1.18358.
Commentary/ Reason:
The euro traded 0.14% lower at $1.19003 against the dollar on Tuesday, slipped after jumped around 0.5% yesterday.
The pair move moved moderately higher on Monday on strength in German bund yields. The 10-year German bund yield rose 2.9 bp to -0.171%, which improved the euro’s interest rate differentials.
However, ECB comments were dovish for monetary policy and negative for EUR/USD. ECB Governing Council member Holzmann said projections for inflation to taper off beyond 2021 suggest there is "no occasion to raise interest rates" for now. Also, ECB Governing Council member Centeno said, "all the available analysis indicates that the events associated with inflation are temporary," and there is no evidence of "permanent moves" in the inflation rate.
The firmer moves by the dollar today were influenced by a better T-note yield compared than yesterday.
The EUR/USD may consolidate for a period of time within a transitory trading range between the 1.184 and 1.193 price levels. Sellers appear active in early trading after a rally attempt was made in yesterday’s session. Momentum indicators suggest a bullish reversal is underway.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92397 and 0.92661.
- Support line of 0.91546 and 0.91283.
Commentary/ Reason:
The dollar traded higher against the Swiss franc today. At the time of writing, the pair is trading at 0.92047, rose 0.3%.
The dollar was higher after alternating between losses and gains in the several recent session as investors digested elevated U.S. inflation following the FOMC outcome last week.
The dollar appears to be holding up quite well, supported by the strength in T-note yields today.
The dynamics around the U.S. dollar expected to continue to influence the pair’s performance for the time being.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.38390 and 1.38670.
- Support line of 1.37830 and 1.37550.
Commentary/ Reason:
Sterling pulled back, unable to hold to its 1% overnight bounce. The pair bought at $1.39022, retreated 0.22%
The pound opened higher against the U.S. dollar today as the greenback retreated amid a recovery in risky assets. Traders appeared to lean on the side of inflation that is likely to be transitory, implying hope that U.S. monetary normalisation may not happen too soon.
British economy reopening plan and BoE policy decision are watched by most traders this week.
The Prime Minister Boris Johnson said England is on course to be able to lift coronavirus restrictions as planned on July 19, despite the spread of the delta variant.
While the BoE may be forced to act next due to inflation data. Britain’s top central bank officials look set to remain divided this week over whether to pull the plug on their 875 billion-pound ($1.2 trillion) government bond purchase programme, after inflation hit its highest in nearly two years.
