INTRADAY TECHNICAL ANALYSIS 30 JUNE (observation as of 08:00 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.05319 and 1.05701.
- Support line of 1.04080 and 1.03697.
Commentary/ Reason:
The euro was struggling to regain a footing on Thursday at $1.04443, heading for 5.6% for the quarter and a monthly decline of 2.7% so far, though it remains just above the May trough of $1.03498.
The euro tumbled since overnight against a resurgent U.S. dollar, which benefited from safe-haven demand on renewed worries about higher rates and a global recession.
Speaking at the European Central Bank's annual conference in Sintra, Portugal, U.S. Federal Reserve chair Jerome Powell reiterated his stance to keep raising interest rates in a bid to quell rising inflation. Fed Chair Powell said the U.S. economy is in "strong shape" and "overall the U.S. economy is well-positioned to withstand tighter monetary policy."
He said it was important to bring down inflation, even if it meant economic pain, with similar remarks from ECB President Christine Lagarde.
Lower European government bond yields also weakened the euro’s interest rate differentials. The 10-year German bund yield dropped after German Jun CPI unexpectedly eased. Also, a fall in Eurozone Jun economic confidence to a 15-month low undercut EUR/USD.
The EUR/USD pair declined strongly yesterday to surpass the previous support level, showing some slight bullish bias affected by stochastic positivity, while the EMA50 forms negative pressure against the price, to support the chance of continuing the bearish trend in the upcoming sessions, on the next target at 1.0408.
More expected decline on the intraday basis is expected unless the price rallied to breach 1.0630 and hold above it.
The EUR/USD pair is traded below 1.0550 level, which puts the price under more expected negative pressure in the upcoming period, on its way to head towards 1.0461 followed by 1.0409 as next negative targets.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.96431 and 0.96853.
- Support line of 0.95065 and 0.94643.
Commentary/ Reason:
The dollar dropped to a fresh two-month low versus the Swiss franc on Wednesday and was last traded at 0.95470 francs on Thursday.
The Alpine currency, another beneficiary of safe haven flows still basking in the afterglow of the Swiss National Bank's surprise rate hike two weeks ago.
A steady and aggressive global switch to tighter policy has stoked recession worries and shaken financial markets in recent months.
The USD/CHF pair attempted to break 0.9506 level and finds solid support there and open the way to rally towards 0.9464 as a next negative target.
The EMA50 continues to support the bearish wave that moves organized inside the bearish channel that appears on the chart, which will remain valid conditioned by the price stability below 0.9643 and 0.9685.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 137.144 and 138.417.
- Support line of 135.598 and 133.325.
Commentary/ Reason:
The Japanese yen traded at 136.182 per dollar, after briefly breaking the 137 level.
The dollar eased on Thursday after hitting a fresh 24-year peak of 137 yen overnight, as the gap between a hawkish Fed and a dovish Bank of Japan continues to weigh heavily on the yen.
Divergent central bank policies continue to pressure the yen, with the Fed, BoE, and ECB ending their QE programs and raising interest rates while the BoJ maintains its QE program and record low interest rates. The BoJ is able to keep interest rates pinned down because Japanese inflation is still low by global standards, though even small price rises are causing a messaging problem for the central bank.
Weaker than expected Japanese economic data Wednesday on May retail sales and Jun consumer confidence also weighed on the yen.
The USD/JPY pair attempts to finds solid resistance, waiting to get positive motive that assist to push the price to confirm the breach and rally towards our next positive target at 137.144.
Although overbought RSI and nearly hurdles challenge intraday buyers, the pair remains on the bull’s radar after rising for four consecutive days.
The bullish trend is continuing to be suggested, noting that breaking 135.598 will stop the expected rise and press on the price to return to the correctional bearish track again.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.24003 and 1.25543.
- Support line of 1.20293 and 1.19383.
Commentary/ Reason:
Sterling bounced slightly, added 0.12% to $1.21335 in its fourth day decline.
It hunkered down, with losses this week leaving it set for a 3.8% monthly decline.
The British pound struggles for clear directions as it seesaws rangebound around two-week-long.
The consolidation behaviour, however, could end later in the week, paving the way for a technical breakout amid several key high-impact events on the calendar, including a speech by Fed Chair Powell and BoE's Bailey at the ECB’s Sintra retreat, and ahead of the UK GDP.
A reminder that at the most recent policy meeting, the BoE slightly toughened their forward guidance with regard to rate hikes, prompting markets to boost expectations of a 50bps rate rise.
On the other hand, investors also refrain from betting on a pound recovery following the British government's approval of the bill that will allow them to unilaterally scrap parts of the post-Brexit trade agreement with the EU.
The GBP/USD pair to approach the 1.20 barrier, reinforcing the expectations of continuing the bearish trend, which next target at 1.1938.
The EMA50 supports the expected decline, taking into consideration that breaching 1.2400 will stop the current negative pressure and lead the price to start new recovery attempts.
