INTRADAY TECHNICAL ANALYSIS 18 NOVEMBER (observation as of 05:40 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.14624 and 1.15041.
- Support line of 1.13277 and 1.12861.
Commentary/ Reason:
Euro was at $1.13273, recovered from a trip below $1.13, but still languishing near a 16-month low, undercut by central bank divergence.
The markets seeing the eurozone near the back of the central bank rate-hike queue, while the Federal Reserve surprised investors with a hawkish shift in tone.
Strong U.S. retail sales data earlier this week added fuel to the dollar's recent rally, which started last week after a strong U.S. inflation print bolstered market bets that Fed to raise rates around the middle of next year.
The euro also weighed as Europe suffered from worries about growth amid a renewed surge in COVID-19 cases. Germany on Wednesday reported a 7-day incidence rate of new COVID-19 infections rose to a record of 319.5 per 100,000 people.
Germany's parliament is due to vote on Thursday on stricter measures to deal with the outbreak, while Austria imposed a lockdown on unvaccinated people at the start of the week. France, the Netherlands, and many countries in Eastern Europe are also struggling to contain infections.
The EUR/USD is struggling to extend the recovery from a new 16-month lows of 1.12639, currently battling 1.1300, as the U.S. dollar clings onto the recent upside.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.93326 and 0.93639.
- Support line of 0.92312 and 0.91999.
Commentary/ Reason:
The dollar traded slightly higher against the Swiss franc on Thursday, although eased off its one-month high touched yesterday following mixed signal coming from the Fed officials amid lower-than-expected housing starts statistics.
The pair was last bought at 0.92860.
The dollar for now still clings onto the recent upside after a surge in U.S. inflation boosted the bets that the Federal Reserve to hike interest rates faster than expected.
On the other hand, the franc holds on to its safe-haven appeal, as investors see the currency as a safe haven investment amid market uncertainties due to rising COVID-19 cases in Europe.
The recent price resistance at 0.933 price level yet to be broken. On the downside, below 0.923 minor support will turn intraday bias back to the downside for 0.919 next.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 114.992 and 115.389.
- Support line of 113.707 and 113.309.
Commentary/ Reason:
The dollar edged 0.10% higher against the safe-haven yen on Thursday, to trade at 114.205 yen. The pair recovered slightly after had its sharpest one-day slump in three months on Wednesday, down 0.67%.
The dollar remains supported, on expectations of a sooner-than-expected rate hike by the Federal Reserve to cool an over-heating economy, ahead of the BoJ. The Bank of Japan has maintained one of the most dovish stances among central banks of G7 nations.
Decline in the Nikkei Stock Index on today meanwhile boosted some safe-haven demand for the yen. Sensitivity to oil prices also keeps the safe haven yen in check.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.35220 and 1.35610.
- Support line of 1.33960 and 1.33570.
Commentary/ Reason:
Sterling was at $1.34868, hovering just below a one-week high having jumped 0.5% on Wednesday after a jump in Britain's October inflation piled pressure on the Bank of England to hike rates at its meeting next month.
British inflation came in stronger than expected The U.K.’s CPI rose by 4.2% in the 12 months to October, up from 3.1% in September and beating economists’ expectations of 3.9%. It hit a 10-year high as household energy bills rocketed, bolstering expectations the BoE will raise interest rates in December.
The sterling also strengthened after British Brexit Minister David Frost said on Wednesday that his government's preference is to strike a deal to improve post-Brexit trade arrangements for Northern Ireland and that the agreement can be reached by Christmas.
