INTRADAY TECHNICAL ANALYSIS 29 OCTOBER (observation as of 06:10 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.17208 and 1.17636.
- Support line of 1.15821 and 1.15392.
Commentary/ Reason:
The euro held at $1.16749, headed to a 0.3% weekly gains, and now hovering just below $1.16920, a one-month high marked overnight.
The euro was strong as comments by ECB President Christine Lagarde on Thursday were interpreted as not going far enough in affirming the central bank’s dovish stance against market expectations for +20 bp ECB rate hikes in 2022, causing the markets to harden those rate-hike expectations and providing a bullish factor for the euro.
Meanwhile the Fed is widely expected to announce tapering of its bond purchase with interest rate lift-off at its policy meeting due next week.
The EUR/USD buyers returned, grinds higher heading into Friday’s European session.Traders will have their eyes on economic gauges from both regions later in the day, with Europe seeing a preliminary reading of the CPI, while the U.S. gets personal spending and income data.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.91933 and 0.92260.
- Support line of 0.90872 and 0.90544.
Commentary/ Reason:
The dollar was a tad higher against the Swiss franc, traded at 0.91221.
Mixed market sentiment, in the wake of weaker-than-expected U.S. GDP report was dovish for Fed policy, and strong earnings reports keeps the dollar underpinned.
On the other hand, the Swiss franc gains momentum on its safe-haven appeal. The risk-off impulse in the market on Friday benefited the safe-haven Swiss franc.
The USD/CHF licks wounds after the previous session’s heavy sell-off. The pair fell in more than a 70-pips movement overnight to stays around a one-month low.
[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:
Against the yen, the dollar was mostly unchanged at 113.624, continuing to ease back gradually from the almost three-year high of 114.692 reached last week.
The USD/JPY is heading for a slight gain for the week, standing firm on Friday following a mild reaction on the outcome of BoJ policy meeting on Thursday.
The Bank of Japan kept ultra-easy policy as expected, with short-term interest rate target remaining around -0.1%.
Investors also refrained from placing big bets ahead of an outcome of the country’s general election, on Sunday.
The USD/JPY pair continue oscillating within the 113.27 support line and 114.167 resistance price level as the range has contained price action in recent trading. Buying pressure spiked in the last two trading sessions when the pair approached the support line.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.38364 and 1.38727.
- Support line of 1.37190 and 1.36827.
Commentary/ Reason:
Sterling was flat at $.1.37851 as it continued to fluctuate near a one-month high reached last week.
Currency traders digested moves in interest rate markets, comments by the ECB President Christine Lagarde and a weaker-than-expected U.S. economic report.
The pound has been buffeted recently by speculation over whether the Bank of England would proceed with an interest rate hike at its policy meeting. Both the Fed and the BoE will meet next week, with markets siding with the pound having priced a good chance that the BoE is to raise interest rates before the end of this year.
Pickup in the U.S. Treasury bond yields however, helped limit the greenback losses and kept a lid on any meaningful gains for the GBP/USD pair.
