INTRADAY TECHNICAL ANALYSIS 19 JULY (observation as of 07:40 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.02636 and 1.03857.
- Support line of 1.00194 and 0.98973.
Commentary/ Reason:
The euro was $1.01567, rose for a second day of strong gains having recovered from its brief fall below one U.S. dollar last week for the first time since 2002.
The euro was supported as the ECB is poised to raise interest rates on Thursday for the first time in more than a decade. It has telegraphed a 25 basis-point move, but heated inflation also has some traders punting for a half-point hike.
Though, uncertainty about a potential energy supply crunch in the eurozone kept gains capped. Gas is supposed to resume flowing through the Nord Stream pipe from Russia to Germany after a shutdown for scheduled maintenance. Russia's Gazprom declared force majeure on gas supplies to Europe to at least one major customer, in a letter dated July 14 and seen by Reuters on Monday.
The EUR/USD pair bounced bearishly to hint stopping the correctional bullish wave and head to resume the main bearish trend again, heading to 1.0019 as a first main station.
Noting that breaching 1.0263 will lead the price to achieve additional bullish correction that its next targets reach 1.0385.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.98370 and 0.98712.
- Support line of 0.97264 and 0.96922.
Commentary/ Reason:
The dollar slipped on Tuesday, dropped 0.40% to trade at 0.97335 franc.
The Swiss franc rebounded higher against the U.S. dollar as cheaper prices prompted some investors to return to the safe haven currency.
The Swiss franc standing out as a safe-haven currency as traders awaited on more economic data and central banks decision later this week.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 139.834 and 140.620.
- Support line of 137.293 and 136.508.
Commentary/ Reason:
The dollar pared losses to trade 137.996 Japanese yen, below its 24-year high of 139.397 hit Thursday last week.
A weaker dollar on the day sparked short covering in the yen, though markets are keenly watching the Bank of Japan's central bank meeting later in the week on Thursday. Though no changes are expected from the BoJ, which is likely to maintain its ultra-easy policies, meaning more pain for the beleaguered yen.
The Bank of Japan holds its policy meeting amid concerns the breakneck drop in the yen is adding to the cost of imported commodities and widening the country's trade deficit.
The USD/JPY pair fluctuates within tight track since yesterday, with the EMA50 meets the bullish channel’s support line to protect trading inside it, to keep the bullish trend scenario active for the upcoming period, motivated by stochastic positivity, waiting to resume the bullish bias that targets 139.834 and 140.620 levels, while holding above 137.293.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.20550 and 1.21203.
- Support line of 1.18437 and 1.17783.
Commentary/ Reason:
Sterling rose 0.40% to $1.19958, edging back toward Monday's one-week high of $1.20326.
It slumped to $1.17604 on Thursday for the first time since March 2020 as Britain faces an acrimonious and divisive contest to replace ousted Prime Minister Boris Johnson.
Traders now await the key political plays in the UK, as well as headlines regarding inflation, employment, and jobs report. Moving on, the key week starts with a light calendar, but UK employment data, Consumer Price Index, Retail Sales, and preliminary PMIs for July will be crucial economics to watch for fresh impulse. Also, critical will be to watch the UK PM race and US PMIs for clear directions.
Overall, GBP/USD is likely to be more volatile this week.
