INTRADAY TECHNICAL ANALYSIS 8 NOVEMBER (observation as of 06:15 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.16542 and 1.16918.
- Support line of 1.15326 and 1.14950.
Commentary/ Reason:
The euro touched a 16-month trough on Friday before steadying at $1.15216 on Monday.
The next big test of faith in the Federal Reserve's insistence on patience looms on Wednesday, when U.S. inflation data is expected to show consumer growth running hot.
The EUR/USD pair lacked any firm directional bias and seesawed between tepid gains/minor losses, around mid-1.1500s.
There isn't any major market-moving economic data due for release on Monday, either from the Eurozone or the US. Hence, the focus will be on Powell's remarks at an online conference later today, which may influence the greenback price dynamics and produce some trading opportunities around the EUR/USD pair. Attention also to be on Vice Chair Richard Clarida who is talking on Fed and ECB policy.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.91499 and 0.91714.
- Support line of 0.90805 and 0.90590.
Commentary/ Reason:
The dollar rose 0.15% against the Swiss franc on Monday, trading at 0.91344.
The dollar made a steady start to the week but stayed below Friday peaks, as currency traders seek a path between markets’ volatile rate projections and central bankers vowing a wait-and-see approach despite surging inflation.
The USD/CHF pair has established a bearish trend with lower highs and lower lows. However, the pair has yet to break the lower bound of a previous consolidation channel at the 0.908 support line. A rebound has failed to stimulate a rally indicating a lack of appetite from buyers to drive price action.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 114.182 and 114.460.
- Support line of 113.280 and 113.002.
Commentary/ Reason:
The dollar clawed back some ground lost last week, rising 0.2% to 113.602 yen on Monday.
The dollar climbed against the Japanese yen as the 10-year T-note yield steadying on the day.
Japan is considering an economic stimulus package worth more than 30 trillion yen ($265 billion) aimed at easing the pain from the COVID-19 pandemic, a plan that would require issuing new debt, Kyodo news reported.
The USD/JPY has begun to pullback and has once again touched and rebounded from the 113.28 support line. The pair is likely to continue oscillating within the current trading range as price action continues to consolidate. Momentum indicators have clear downward trajectories.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.36954 and 1.37810.
- Support line of 1.34186 and 1.33330.
Commentary/ Reason:
Sterling, which was walloped when the BoE surprised traders by holding rates steady last week, hovered at $1.34915 on Monday after falling as far as $1.34242 on Friday, a five-week low.
The BoE's surprise triggered a sharp pullback in aggressive bets on imminent rate hikes in Britain and globally. The mixed market sentiment combined with escalating Brexit concerns take the wind out of GBP/USD brief recovery.
