INTRADAY TECHNICAL ANALYSIS 8 JULY (observation as of 05:50 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.18377 and 1.18592.
- Support line of 1.17680 and 1.17464.
Commentary/ Reason:
The euro traded at $1.7951 per dollar, just off a 3-month low of $1.17816 touched overnight, when German data raised doubts about the strength of Europe's economic recovery.
Investor sentiment in Germany, the eurozone's biggest economy, fell sharply in July, though it remained at a very high level, the ZEW economic research institute reported. Losses in EUR/USD were limited after the European Commission raised its Eurozone 2021 GDP and inflation estimate.
The dollar however unable to fully capitalized the euro weakness after its 10-year T-note yield fell to a 4-1/2 month low, following the minutes of the Jun 15-16 FOMC meeting that were slightly dovish.
Later today, ECB President Christine Lagarde will hold a press conference after the monetary authority announces the outcome of an 18-month strategy review, which is likely to include a shift in the inflation target to 2% from "below but close to 2%" currently - which would theoretically allow for inflation overshoots.
The risk for the EUR/USD pair remains skewed to the downside. The chart shows that the pair keeps developing below all its moving averages, which head lower with uneven degrees of bearish strength. If the current trend continues, then it could be forced to defend the next support region around 1.176, the support line off November 2020 lows.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92780 and 0.92965.
- Support line of 0.92179 and 0.91993.
Commentary/ Reason:
The dollar hovered just below the opening price against the Swiss franc on Thursday, traded at 0.92472.
The dollar was weighted by the decline in the 10-year yield, although still retained bid on the risk of higher U.S. interest rates and as investors looked for safety.
USD/CHF is staying rangebound and intraday bias remains neutral first. Another rise could still be seen as long the parallel upward trendline holds. Break would support that the rebound has completed, and turn bias back to the downside for this low.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.38530 and 1.38873.
- Support line of 1.37417 and 1.37073.
Commentary/ Reason:
Sterling eased 0.05% against the dollar at $1.37914.
The GBP/USD pair seesawed between gains and losses in the day. The greenback surged amid higher demand for U.S. bonds, which in turn pushed yields lower.
Meanwhile, UK data failed to impress, as the country published the June Halifax Price Index, missing the market’s expectations.
The COVID-19 situation in the UK also weighted, as the country reported over 32K new cases, the biggest one-day increase since late January, although there are no news suggesting restrictive measures will be maintained after July 19.
The GBP/USD pair offers a neutral-to-bearish stance in the near-term, with another leg south still likely. The pair breaching 1.385 and holding above it will lead the price to start recovery attempts. The main support is around 1.374, the low set last Friday.
