INTRADAY TECHNICAL ANALYSIS 23 SEPTEMBER (observation as of 05:25 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.17535 and 1.17813.

-        Support line of 1.16636 and 1.16359.

Commentary/ Reason:

  1. Succumbed to one-month low of $1.1684 in early Thursday trade, the euro pulled back to $1.17096, rose around 0.20%.

  2. The euro was pressed towards its major support levels, on dollar strength and a hawkish Fed, with the Fed expected to taper QE, far sooner than its developed market peers are expected to move.

  3. The U.S. central bank left policy settings unchanged overnight and, as expected, did not announce the beginning of asset purchase tapering. But the Federal Reserve said, "a moderation in the pace of asset purchases may soon be warranted" and Fed Chair Jerome Powell said board members believed tapering could conclude around mid-2022, opening the way for rate hikes after that.

  4. The EUR/USD bounced off the resistance of the 1.175 level on Tuesday. Above 1.175 minor resistance will turn bias back to the upside for 1.178.

  5. On the other hand, the fall might be still in progress and intraday bias remains on the downside for 1.1663 low. Decisive break there will resume the fall to 1.1635 key support next.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.92874 and 0.93107.

-        Support line of 0.92120 and 0.91887.

Commentary/ Reason:

  1. The dollar marginally moved on Thursday against the Swiss franc, traded to 0.92574 franc as investors focused on two key risks - a default by Chinese property developer Evergrande and the post-FOMC statement.

  2. The dollar was supported on the hawkish Fed, with the Fed expected to taper QE well before the ECB.

  3. The Swiss franc meanwhile holds some ground on its safe-haven appeal amid risk aversion on the rapid spread of the Delta variant of the coronavirus and China’s Evergrande liquidity risk.

  4. The pair’s upside currently aims for July’s top near 0.9287, with the 0.9310 threshold may offer a halt.

  5. Meanwhile, a downside break of 0.9212 may witness to the next support around the 0.9188 level.

  6. The USD/CHF regains upside momentum, but the bulls should stay cautious.

USDCHF

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.36887 and 1.37200.

-        Support line of 1.35873 and 1.35560.

Commentary/ Reason:

  1. Sterling was last trading at $1.36406, rose 0.22% on the day ahead of a policy announcement by the Bank of England later today, with traders expecting it to keep rates steady but wary of any hawkish surprises.

  2. Traders see potential for gains in the currency if the bank adopts a hawkish tone or more members being calling for asset purchase tapering.

  3. The GBP/USD pair keeps trading near its September low. A test of 1.3556 is on the cards, while a break below the level should lead to a steeper decline.

  4. Alternatively, the pound bulls need to find a strong foothold toward 1.3688, in order to initiate a next recovery towards 1.3720.

GBPUSD