INTRADAY TECHNICAL ANALYSIS 1 JUNE (observation as of 05:25 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.22489 and 1.22692.
- Support line of 1.21833 and 1.21630.
Commentary/ Reason:
The euro was little moved at $1.22239 on Tuesday, not far from a nearly 5-month high of $1.22627 touched last week.
The euro posted 0.3% gain overnight taking advantage of the U.S. market holiday on Monday.
A decline in T-note yields also weakened the dollar’s interest rate differentials after the 10-year T-note yield fell.
Next, investors will be paying attention to the ISM Manufacturing PMI due on Tuesday.
EUR/USD price action is climbing, once again, whilst hugging the ascending trendline, which remains a key support level for the pair. The next target is around the 1.224 price line, which represents a recent high.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.90133 and 0.90270.
- Support line of 0.89692 and 0.89556.
Commentary/ Reason:
The dollar rose fractionally higher against the Swiss franc on Tuesday, to trade at 0.89887.
The pair was little changed and trading in rangebound as traders awaited on more economic data for the day to gauge for the next inflation trajectory.
The dollar, meanwhile, was more advantageous and supported as investors returned to safe-haven currencies due to cautious sentiment on the global market.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.42474 and 1.42733.
- Support line of 1.41633 and 1.41373.
Commentary/ Reason:
The British pound rallied as high as $1.42472 earlier today to touch a 3-month peak, amid market expectations for policy tightening in the UK.
The improving outlook for growth is fuelling speculation the Bank of England will join its peers in Canada and New Zealand by signalling it may start to raise interest rates next year.
The pound last bought at $1.42472 mid-morning Tuesday. The currency rallied 2.8% in May, a second straight monthly gain.
The pound advanced as traders bet the U.K.’s economic recovery will gain traction with the rollout of coronavirus vaccines. The progress of vaccination puts the U.K. closer to economic normalization than other countries.
In its success in containing the pandemic, the authorities planning to fully reopen the economy on June 21. While the discovery of a highly transmissible variant of the virus originating from India poses a risk, Prime Minister Boris Johnson has said there is no conclusive reason to delay the easing of the lockdown.
