INTRADAY TECHNICAL ANALYSIS 23 JUNE (observation as of 08:00 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.06309 and 1.06832.
- Support line of 1.04615 and 1.04092.
Commentary/ Reason:
The euro was little changed at $1.05666.
The euro’s movement was hampered, reflecting the broad risk-off sentiment. Global volatility continued and market sentiment shifted to a more negative setting amid fears over surging inflation and slowing economic growth.
Meanwhile, the dollar remained under pressure alongside U.S. Treasury yields.
Overnight, Fed chair Jerome Powell said in testimony to Congress that the central bank is fully committed to bringing prices under control even if doing so risks an economic downturn. He said a recession was "certainly a possibility," reflecting fears in financial markets that the Fed's tightening pace will throttle growth.
The EUR/USD pair breached yesterday’s resistance level, which leads the price to return to the correctional bullish track again, paving the way to achieve gains that start at 1.0630.
The RSI(14) also is attempting to shift into a bullish range of 60.00-80.00, which will strengthen the shared currency bulls further.
Hence, the bullish bias will be suggested, supported by moving above the EMA50, noting that breaking 1.0461 will stop the positive scenario and press on the price to decline.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.96938 and 0.97353.
- Support line of 0.95593 and 0.95177.
Commentary/ Reason:
The dollar added 0.40% against the Swiss franc on Thursday, to trade at 0.96466.
The safe haven dollar gained ground as investors turned nervous again about global growth prospects.
Investors also continue to assess fresh cues from top central banks about their monetary policy plans, especially from the U.S. Fed.
The USD/CHF pair continues to fluctuate, with our view on the continuation our bearish overview efficiently for the upcoming period, opening the way to head towards the next station that reaches 0.9559.
On the flip side, the greenback bulls could regain control if it traded around Friday’s high of around 0.9693 and 0.9735.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 137.200 and 138.226.
- Support line of 135.148 and 134.122.
Commentary/ Reason:
The dollar slid 0.56% to 135.436 yen, retreating from a 24-year high of 136.710 reached on Wednesday.
The USD/JPY Wednesday fell back from a new 24-year high after a fall in T-note yields sparked short-covering in the yen. Markets have become increasingly concerned that the Fed's commitment to quelling red-hot inflation will spur a recession. Those worries sent the 10-year Treasury yields sliding to an almost two-week low.
The yen though, remains under pressure as elevated bond yields in the U.S. and Europe contrasted with low Japanese interest rates.
BOJ Governor Haruhiko Kuroda has vowed to defend the bank's 0.25% cap for the 10-year Japanese government bond (JGB) yield, to support the economy with very low interest rates, making it an outlier among other major central banks.
The currency also has been weakening as higher energy prices put pressure on Japan's current account.
The USD/JPY pair heads towards achieving bearish correction on the intraday basis, targeting testing 135.148. Though the decline is expected to be temporary, waiting to resume the main bullish wave, taking into consideration on breaching 137.200.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.24003 and 1.25543.
- Support line of 1.20293 and 1.19383.
Commentary/ Reason:
Sterling slipped 0.65% to $1.21802.
The risk-averse market environment and overnight soft inflation data from the UK weigh on the pair mid-week and the technical outlook suggests that additional losses are likely in the short term.
The UK's Office for National Statistics (ONS) showed on Wednesday that the annual inflation in the UK, as measured by the CPI index, edged higher to 9.1% in May as expected. On a positive note, the Core CPI, which excludes volatile food and energy prices, declined to 5.9% on a yearly basis from 6.2% in April.
The Bank of England last week implemented a fifth consecutive hike to interest rates, though stopped short of the aggressive hikes seen in the U.S. and Switzerland, as it looks to tame inflation without compounding the current economic slowdown.
