INTRADAY TECHNICAL ANALYSIS 27 OCTOBER (observation as of 05:40 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.16681 and 1.16972.

-        Support line of 1.15739 and 1.15448.

Commentary/ Reason:

  1. The euro stood at $1.16038, edged slightly higher on the day, though still hovering just above its one-week low touched overnight.

  2. Keeping the euro in check is the ECB policy meeting due tomorrow, where the central bank is expected to be slow in tightening its policy, push back on market inflation forecasts.

  3. The Fed meanwhile will meet next week. The divergent monetary policy outlooks between the Federal Reserve and the ECB could continue to undermine the euro.

  4. The euro on Tuesday dropped to a 1-week low on lower German bund yields after the 10-year German bund yield fell to a 1-week low of -0.140%. While the U.S. economic data was bullish for the dollar, as the U.S. Sep new home sales and consumer confidence index both rose better-than-expectations.

  5. The EUR/USD pair continue to languish within the narrow trading range between 1.157 and 1.166 price levels, with plenty of room to move in case the right catalysts emerge. Recent buying at the lower bound of the range prevented a break lower.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.92182 and 0.92410.

-        Support line of 0.91447 and 0.91220.

Commentary/ Reason:

  1. The dollar was muted in the middle of the week against the Swiss franc, traded at 0.91937, easing after testing a one-week high of 0.92253 overnight.

  2. Mixed market sentiment, in the wake of growing inflation fears, strong American earnings reports and U.S. stimulus progress, keeps the dollar’s safe-haven appeal underpinned.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 114.167 and 114.612.

-        Support line of 113.277 and 112.832.

Commentary/ Reason:                                        

  1. The dollar slipped slightly to 114.040 but keeping it near its four-year high of 114.678 touched a week ago.

  2. The yen was calm as Japan’s central bank policy meeting tomorrow is awaited. The BoJ is widely expected to downgrade its economic assessment at its policy announcement, with markets betting the central bank is to retain its easy monetary policy stance.

  3. Investors also are cautious ahead of Japan's lower house elections on Sunday that could drain support for the country's new prime minister.

  4. The USD/JPY looks set to float just below the resistance line as neither buyers nor sellers have the conviction to dominate price action. A breakdown in the rally may now see the pair contained between the rangebound price levels.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.38488 and 1.38873.

-        Support line of 1.37239 and 1.36853.

Commentary/ Reason:

  1. Sterling was steady at $1.37644 on Wednesday.

  2. The Fed and the Bank of England will meet next week, with markets siding with the pound having priced a good chance that the Bank of England is to raise interest rates before the end of this year.

  3. A modest dollar strength however, seemed to cap the upside for the pair amid fresh Brexit jitters.

  4. The GBP/USD pair attempted to breach 1.384 resistance line, but couldn’t manage to hold the bulls for long time, back to fluctuate at the bullish channel’s support line again.

GBPUSD