INTRADAY TECHNICAL ANALYSIS 13 JUNE (observation as of 09:20 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.06908 and 1.08272.
- Support line of 1.04180 and 1.02816.
Commentary/ Reason:
The euro was languishing at $1.04784, down 0.35% to slid to May 17 low.
The jump in yields and the anticipation of a more aggressive Fed helped make the U.S. dollar a more attractive investment.
The dollar rallied on higher T-note yields that were sparked by the unfavourable U.S. CPI report. The headline May CPI rose to a new 40-year high of 8.6% y/y.
The 10-year T-note yield rose sharply since Friday, to jump to more than one-month peak of 3.201%, putting it just two-tenths of a basis point from the highest since November 2018.
The euro meanwhile be undercut by the ECB’s delay in cutting interest rates until next month, thus putting it even farther behind the Fed on a rate-hike regime.
The EUR/USD pair confirmed breaking previous supports level after closing last Friday below it, reinforcing the expectations of continuing the domination of the bearish trend, and the way is open to achieve our next target at 1.0418, which breaking it represents the key to head towards the previously low at 1.02816.
Therefore, we expect to witness more decline in the upcoming sessions, except it rose above 1.06908 to stop the current negative pressure and lead the price to start recovery attempts on the intraday basis.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.99272 and 0.99776.
- Support line of 0.97643 and 0.97140.
Commentary/ Reason:
The dollar jumped on Monday, rising 0.40% to 0.99141, buoyed by a rise in Treasury yields as expectations of a more hawkish Fed are pushing up the dollar against the safe haven currency.
U.S. benchmark yields advanced after red hot U.S. inflation data drove U.S. Treasury yields higher.
Central banks' efforts to raise interest rates to curtail inflation will remain in focus this week. The Federal Reserve are expected to raise rates at their meetings and there is a chance the Swiss National Bank will do the same.
The Swiss National Bank will meet on Thursday, and a 25-bps increase is on the cards.
The USD/CHF pair opening the way to achieve more expected gains in the upcoming period, waiting to visit 0.9927 and 0.99776 as the next main target. Bullish trend will remain active conditioned by the price stability above 0.9764.
[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 rose as high as 135.185 yen, its highest since October 1998, buoyed by a rise in Treasury yields having gained for each of the past seven sessions, as the policy divergence between hawkish central banks overseas and the dovish Bank of Japan becomes ever more apparent.
The gap between Japanese and U.S. benchmark yields widened after red hot U.S. inflation data drove U.S. Treasury yields higher. U.S. Treasury yields held higher in the afternoon of Asia trading hours. The benchmark 10-year Treasury note yield climbed to 3.172% while the yield on the 2-year Treasury surged to 3.1472%. In contrast, the yield on the 2-year Japanese Government Bond last stood in negative territory at around -0.049%.
Higher energy prices have also hurt Japan's balance of payments, weighing on the yen.
Japan's top government spokesperson earlier today issued a fresh warning to markets that Tokyo is concerned about sharp yen falls and ready to "respond appropriately" if needed.
The highly-anticipated outcome of a two-day FOMC meeting is scheduled to be announced on Wednesday. This will be followed by the BoJ meeting on Friday, which should help determine the next leg of a directional move. In the meantime, the pair is likely to consolidate its recent gains amid absent relevant US macro data on Monday.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.25940 and 1.28100.
- Support line of 1.21620 and 1.19460.
Commentary/ Reason:
The sterling was 0.80% lower at $1.22146, taking little support from expectations the Bank of England will raise rates on Thursday, which would be its fifth increase since December.
The GBP/USD bears keep reins for the fourth consecutive day while dropped to new two-year low earlier in the session.
The GBP/USD pair supports the chances of continuing the bearish trend on the intraday and short-term basis, paving the way to head towards 1.2162 as a next main target. The EMA50 continues to support the expected bearish wave, which will remain valid unless the price rallied to breach 1.2594 and hold above it.
The GBP/USD remains on the bear’s radar ahead of the monthly data dump, as well as monetary policy meetings of the Fed and the BoE. However, the immediate downside has multiple challenges and hence a corrective pullback can’t be ruled out.
