INTRADAY TECHNICAL ANALYSIS 9 NOVEMBER (observation as of 04:50 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, which had dropped to a 15-month trough of $1.15131 in the wake of Friday's strong U.S. jobs figures, held at $1.15938 on Tuesday.
The euro garnered support on data that showed the Eurozone investor confidence index unexpectedly rose overnight, stronger than expectations. Although gains were limited on dovish comments from ECB Chief Economist Lane, who said, eurozone inflation will ease next year and remains too weak in the medium term, repeating the bank’s long-standing message that high price growth is temporary.
The EUR/USD has gone into a consolidation phase after dropping toward 1.1500. Rebound attempts are likely to remain limited unless driven by fundamentals.
Later today, a slew of central bankers is due to speak, including the ECB President Christine Lagarde at 1300 GMT and Fed chair Jerome Powell at 1400 GMT.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 113.940 and 114.556.
- Support line of 112.708 and 112.092.
Commentary/ Reason:
The Japanese yen traded at 112.863 per dollar, stronger than levels above 113.5 seen against the greenback yesterday.
The dollar slipped to a 3-1/2-week low against the Japanese yen as the 10-year T-note yield was weighted on the day.
The yen also rallied on optimism that a high pace of COVID-19 vaccinations will allow Japan to end pandemic restrictions and fully open its economy. Government data on Monday showed Japan has now vaccinated 73.7% of its total adult population.
Japan also 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 broken the lower bound of the current trading range, as a spike in selling activity has seen a bearish bias begin to influence price action. If the break is sustained, it represents a return to a period of post-pandemic stabilization.
[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 was little changed on Tuesday, traded at $1.35652 after falling to a five-week low of $1.34242 on Friday.
Sterling had made something of a recovery since yesterday as world bond markets pared back some aggressive bets on imminent higher interest rates. It was hammered last week when the BoE surprised markets by holding rates steady.
Although escalating Brexit concerns take the wind out of GBP/USD brief recovery.
In the meantime, investors await the UK preliminary estimate of Q3 GDP growth on Thursday, which is expected to show growth slowing to 1.5% from the previous quarter amid an unprecedented energy crisis and ongoing supply chain issues.
