INTRADAY TECHNICAL ANALYSIS 18 JUNE (observation as of 05:20 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.20082 and 1.20526.
- Support line of 1.18645 and 1.18200.
Commentary/ Reason:
The euro gained 0.08% to 1.19148, to sit just above a 2-month low at $1.18918.
The pair stabilised on Friday and did not show much enthusiasm for bouncing back, with moves only slight.
A jump in the 10-year German bund yield to a 3-week high Thursday improves the euro’s interest rate differentials. The upward revision to Eurozone May core CPI to +1.0% y/y from the previously reported +0.9% y/y, also was hawkish for ECB policy.
However, comments from ECB chief economist who Lane said it's unnecessary and premature to talk about tapering of ECB bond purchases weight on the euro. EUR/USD also weighed after Thursday’s data showed Eurozone Apr construction output fell the biggest decline in 7 months.
The dollar meanwhile holding to the carry-over support from Wednesday on a hawkish FOMC.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92181 and 0.92635.
- Support line of 0.90710 and 0.90255.
Commentary/ Reason:
The dollar steadied against the Swiss franc on Friday, to hover just below the 1-month high of 0.91874 recorded overnight. It was last bought at 0.91870.
The dollar recovered after the FOMC Wednesday afternoon brought forward its hawkish forecast. U.S. Federal Reserve officials unnerved investors with indications that the central bank could begin rising interest rates in 2023, a year earlier than expected.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.40177 and 1.40617.
- Support line of 1.38756 and 1.38317.
Commentary/ Reason:
The British pound last stood at $1.39005, slipped 0.16% on Friday, and looked to surpass its 5-week low of $1.38954 touched yesterday.
While the dollar improves in the pandemic after the 7-day average of new U.S. COVID-19 infections on Tuesday fell to a 14-1/2-month low of 13,501, Britain reported its biggest daily rise in new cases of COVID-19 since Feb. 19 on Thursday, showed 11,007 new infections, up from 9,055 the day before.
The fall in the oil prices also weighed on the pound.
The dollar appears to be holding up well, buoyed by the strength in T-note yields today, supported by the carry-over support from Wednesday on a hawkish FOMC.
