INTRADAY TECHNICAL ANALYSIS 26 OCTOBER (observation as of 06:00 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.16681 and 1.16972.

-        Support line of 1.15739 and 1.15448.

Commentary/ Reason:

  1. The euro last bought $1.16014, hovering near a one-week low touched overnight.

  2. The euro fell 0.31% overnight as Eurozone economic concerns undercut the currency. The softer-than-forecast German business morale and expectations that the ECB will stay dovish when it meets on Thursday dragged on the euro.

  3. While the ECB is likely announcing no change in policy, the central bank is expected to underscore its dovish guidance and might address how inflationary pressures could affect policy.

  4. The greenback meanwhile rebounded on better Treasury yield and as traders looked ahead to tighter U.S. monetary policy.

  5. The EUR/USD pair expected to continue to languish within the narrow trading range between 1.157 and 1.166 price levels. Selling pressure at the upper bound of the range prevented a break and highlighted that currently, bullish sentiment remains weak. 

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.92182 and 0.92410.

-        Support line of 0.91447 and 0.91220.

Commentary/ Reason:

  1. The dollar rose against the Swiss franc, added 0.11% to trade at 0.92085.

  2. Risk-on market sentiment weighs on the Swiss franc as solid company earnings and a glimmer of improvement in U.S.-China trade ties lifted sentiment.

  3. The USD/CHF pair bounced upwards after approaching the support line target at 0.9140, to breach 0.9200 level and settle above it now, which leads the price to achieve more expected rise on the intraday basis, targeting testing 0.921 and 0.924 next.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 114.167 and 114.612.

-        Support line of 113.277 and 112.832.

Commentary/ Reason:                                        

  1. The dollar inched higher against the safe-haven yen, rose 0.20% to trade at 113.944 yen.

  2. The dominant risk-on mood undermined the safe-haven Japanese yen and was seen as a key factor that acted as a tailwind for the USD/JPY pair. Bulls also further took cues from elevated U.S. Treasury bond yields, which revived the U.S. dollar demand.

  3. The yen meanwhile was under pressure on speculation that the BoJ will maintain its extremely accommodative stance when it concludes its 2-day policy meeting this Thursday. 

  4. The USD/JPY bounced from its overnight pullback, as buyers appear to have returned to the pair. Another attempt will likely be made on the price ceiling of our resistance line. Momentum indicators remain in bullish territory, although have pulled back from overbought conditions.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.38488 and 1.38873.

-        Support line of 1.37239 and 1.36853.

Commentary/ Reason:

  1. Sterling was steady at $1.3765 on Tuesday.

  2. The Fed and the Bank of England will meet next week, with markets having priced a good chance that the Bank of England is to raise interest rates before the end of this year.

  3. The GBP/USD pair continues to fluctuate and will likely oscillate within the current trading range. The MACD indicator holds above the midline. Uptick in the MACD could bring more upside momentum for the spot, while alternatively, a break below the intraday’s low would result in the continuation of the prevailing trend with the first downside target at last Tuesday’s low of 1.372 followed by the 1.368 horizontal support zone.

GBPUSD