INTRADAY TECHNICAL ANALYSIS 15 JUNE (observation as of 05:20 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.21386 and 1.21533.
- Support line of 1.20909 and 1.20761.
Commentary/ Reason:
The euro edged marginally higher at $1.2125 on Tuesday.
The pair traded in tight ranges with implied volatility plumbing multi-month lows after last week’s strong inflation readings and a dovish ECB meeting failed to dislodge currencies from recent trading levels.
Long liquidation in the dollar ahead of the two-day FOMC meeting weighed on the dollar.
Meanwhile, a better-than-expected Eurozone economic data on Monday bolstered EUR/USD. Though, the upside was limited by dovish ECB comments by ECB President Lagarde and ECB Governing Council member Holzmann that dampened speculation the ECB will soon begin to taper its bond purchases.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.90065 and 0.90167.
- Support line of 0.89735 and 0.89633.
Commentary/ Reason:
The dollar traded little changed against the Swiss franc on Tuesday, though managed to scale a 1-week high of 0.90013 early in the day. The pair last bought at 0.89935.
The U.S. currency has been buoyed as traders closed short positions before the Fed’s two-day policy-setting confab, which kicks off today.
Swiss franc could advance against the greenback this week if policy is to be kept easy.
Meanwhile a stronger-than-expected readings in U.S. industrial production and retail sales data could potentially push the U.S. Treasury yields higher, prompting the franc to trade lower against the greenback.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.41353 and 1.41567.
- Support line of 1.40661 and 1.40447.
Commentary/ Reason:
The British pound changed hands at $1.41105.
The sterling has likely faced headwinds again with the COVID-19 cases on the rise across the UK again. In fact, this just prompted Prime Minister Boris Johnson to announce a four-week delay of reopening efforts until 19 July.
The pound sterling also weighted in term of deterioration of relations between the EU and the UK. Both accusing the other of acting in bad faith over part of their Brexit divorce deal that covers border issues with Northern Ireland.
Meanwhile, the dollar appears to be holding up quite well despite last week’s sharp decline in ten-year Treasury bond yields. GBP/USD could extend its drop if the Fed meeting reveals a hawkish shift in monetary policy guidance. Markets will likely pay close attention to the updated Fed dot plot and language changed in the press statement.
