INTRADAY TECHNICAL ANALYSIS 9 JULY (observation as of 04:20 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.18850 and 1.19178.
- Support line of 1.17789 and 1.17462.
Commentary/ Reason:
The euro edged slightly lower against the dollar on Friday, although still benefited a 0.47% jump overnight, trading at $1.18370 latest.
The dollar left licking its wounds after its 10-year T-note yield fell to a 4-1/2 month low, following the rise in unemployment claims showing a weaker labour market, as well as the minutes of the Jun 15-16 FOMC meeting that were slightly dovish.
The euro meanwhile garnered support after the ECB raised its inflation goal and said it’s willing to tolerate a limited overshoot of the target, the culmination of an 18-month review published Thursday. The announcement is perceived as net dovish in the short-term.
The EUR/USD has begun to extend its move lower as the pair heads towards the 1.170 support level which represents a recent price low. A return to this support area also represents a complete reversal of the recent rally. Momentum indicators are bearish with RSI moving beyond oversold conditions.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92607 and 0.93108.
- Support line of 0.90985 and 0.90484.
Commentary/ Reason:
The Swiss franc eased slightly, although still held on to gains from Thursday, when it soared 1.13%, to trade at 0.91526 per dollar on Friday.
The dollar was weighted by the decline in the 10-year yield, although investors are still stay invested as the sentiment sours on renewed coronavirus infections, due to the highly contagious Delta variant and jitters to economic recovery.
The pair moves in a narrow trading range and awaits some confirmation before any directional bet. Intraday bias remains neutral at this point first. Sustained break there will pave the way back to retest below the 0.90 low. On the upside, though, break of 0.926 will resume the rally to 0.931 key resistance instead.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.38172 and 1.38417.
- Support line of 1.37381 and 1.37137.
Commentary/ Reason:
Sterling eased 0.06% against the dollar at $1.37732.
The pound remains heavy throughout the week. While the COVID-19 woes put a safe-haven bid under the U.S. dollar and weigh on the quote, Brexit headlines recently dragged the cable. The EU-UK tussles over the Brexit bill are the latest threat to the departure talks among the ex-neighbors.
The GBP/USD pair has so far failed to clear the rangebound trading. Price action may now trade horizontally in the absence of strong conviction from sellers. Momentum indicators have flattened in bearish territory.
The British economic calendar today is all set to entertain traders with May GDP figures for 2021. Also increasing the importance of that time are Trade Balance and Industrial Production details.
The UK data will offer additional clues to the tapering chatters but are less likely to move the GBP/USD much as the markets are more interested in Brexit and the COVID-19 headlines of late. Even so, upbeat data could propel towards breaking the 1.38 immediate hurdle.
