INTRADAY TECHNICAL ANALYSIS 2 JUNE (observation as of 07:50 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.07770 and 1.08459.
- Support line of 1.06392 and 1.05703.
Commentary/ Reason:
The euro edged up 0.30% to $1.06813, as traders turn their minds towards next week's ECB policy meeting, at which the central bank is expected to give more details about its plans for rate increases.
The dollar slipped as U.S. Treasury yields eased in choppy trading. The U.S. benchmark 10-year yield hit a two-week high of 2.951% on Wednesday and was a touch softer at 2.922% on Thursday.
Comments Wednesday from ECB Governing Council member Holzmann meanwhile were hawkish for ECB policy and supportive of EUR/USD when he said the latest all-time high for Eurozone inflation strengthens the case for the ECB to lift interest rates by 50 bp in July.
The common currency however remained under pressure following the hottest eurozone inflation on record that raised worries about the region's growth outlook. Oil embargo on Russia also heightened fears of further downward growth.
Traders also are looking to more U.S. employment data due later today and to Friday's U.S. payroll data.
The EUR/USD pair ended yesterday with strong negativity to break a 1-week low and settles below it, and by taking a deeper look at the chart, we find that the price completed forming negative pattern that supports the chances of continuing the decline in the upcoming sessions, paving the way to head towards 1.0639 and 1.0570 as the next targets.
Therefore, the bearish bias will be suggested for today supported by moving below the EMA50, noting that breaching 1.0777 and holding above it will reactivate the correctional bullish scenario again.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.96499 and 0.96997.
- Support line of 0.95503 and 0.95005.
Commentary/ Reason:
The dollar slipped 0.35% to 0.95904 on Thursday as the risk-on market mood keeps the greenback on the defensive.
The Swiss franc meanwhile was supported after Swiss inflation soared to its highest in 14-years during May. While the 2.9% reading may look modest versus the 8%-plus readings in the eurozone and Britain, it stands out for a country known for its historically low inflation and will further pressure the Swiss National Bank (SNB) to address rising prices.
A retreat in US Treasury yields also weigh on the greenback.
The USD/CHF pair continues to move within sideways track, keeping its stability below 0.9650 level, to keep the bearish trend scenario active on the intraday and short-term basis, waiting to test 0.9550 as a next target.
The EMA50 continues to support the suggested bearish wave, which will remain valid unless the price rallied to breach 0.9650 and hold above it.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 130.607 and 131.196.
- Support line of 128.703 and 128.114.
Commentary/ Reason:
The dollar hit a three-week high against the yen in early trade today, before slightly eased as the U.S. yields inched lower.
The pair was last traded at 129.879.
Benchmark U.S. 10-year Treasury notes last yielded 2.9076%, down from a U.S. close of 2.931% on Wednesday, while the two-year yield slipped to 2.6540% from a close of 2.664%.
The risk-on impulse undermined the safe-haven JPY and acted as a tailwind amid modest US dollar strength.
The USD/JPY pair rallied upwards, waiting for more rise to visit 130.607 and 131.196, its 20-year peak hit in May.
The EMA50 continues to support the suggested bullish wave, noting that breaking 128.703 will press on the price to achieve intraday bearish correction before likely turning back to rise again.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.26176 and 1.26780.
- Support line of 1.24224 and 1.23620.
Commentary/ Reason:
Sterling rose 0.40% at $1.25349 after losing 0.92% on Wednesday.
Trading on Thursday is quieter with London markets shut for a UK holiday.
The pair stays pressured around 1.2422 levels by the press time. Although nearly oversold RSI (14) joins the 100-SMA to challenge the pair sellers around the 1.2422, bearish MACD signals and sustained trading below 200-SMA keep sellers hopeful. A broad one-month-old horizontal area surrounding 1.2362 will be a tough nut to crack for the pair sellers.
Also favouring the bears is the pair’s downside break of an ascending support line from May 13, now resistance around 1.2617. Recovery moves could initially aim for the 200-SMA and May’s peak, respectively around the 1.2617 and 1.2678.
