INTRADAY TECHNICAL ANALYSIS AUGUST 22 (observation as of 09:00 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.01173 and 1.01807.

-        Support line of 0.99905 and 0.99271.

Commentary/ Reason:

  1. The euro was last traded at $1.00023, after falling below parity of 0.99997, the first time since July 15, early in the morning today.

  2. The euro sank to a new five-week trough after Russia announced a three-day halt to European gas supplies via the Nord Stream 1 pipeline at the end of this month, exacerbating the region's energy crisis.

  3. The common currency remain weighed, as there are increasing signs the Eurozone economy is heading into a recession, at a time inflation continues to break record highs, the energy crisis is far from over, and the ECB is set to continue to increase borrowing costs, as well as weighed down by Europe's struggles with the war in Ukraine.

  4. The EUR/USD pair shows more bearish bias to approach the parity again at 1.0000, reinforcing the expectations of continuing the bearish trend, which its next target located at 0.9990.

  5. The EMA50 continues to support the suggested bearish wave, noting that breaching 1.0117 will stop the current negative pressure and lead the price to start recovery attempts on the intraday basis.

  6. The economic calendar today holds nothing of importance for both the U.S. and eurozone respectively but tomorrow PMI figures will grab headlines as expectations indicate yet another moves lower and possible further into contractionary territory on the composite and manufacturing sides. The dollar can track higher this week given the August flash PMIs for the major economies show a further slowing in economic growth or contraction in activity.

  7. Minutes of the European Central Bank's last policy meeting are due this week and are likely to sound hawkish given they decided to hike by 50-bps.

EURUSD

              

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.96243 and 0.96694.

-        Support line of 0.95341 and 0.94890.

Commentary/ Reason:

  1. The dollar extends its uptrend to 0.95908 franc on Monday, on a roll of six consecutive days of uptrend and at a fresh two-week high, as demand for the greenback continued to surge due to positive readings of U.S economic health and safe haven appeal.

  2. Favouring the USD/CHF buyers also following bounce in the U.S. Treasury yields.

  3. The USD/CHF pair shows additional positive trades to approach our waited target at 0.9624, moving within bullish channel that supports the chances of surpassing the mentioned level and achieve more expected gains in the upcoming period, which urges caution from the upcoming trading to push the price to 0.9669 areas on the near-term basis.

  4. Bullish bias will remain valid unless breaking 0.9534 and holding below it.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 137.561 and 138.139.

-        Support line of 135.692 and 135.115.

Commentary/ Reason:                                        

  1. The dollar was firm at 136.946 yen, at its highest since July 27.

  2. Another rise in long-term U.S. bond yields saw the dollar remain supported. The benchmark 10-year U.S. Treasury yields rose above 3% on Monday for the first time since July 21.

  3. The interest rate differential in the U.S. also favouring the greenback over the yen. The Fed is in the middle of a rate-hiking cycle while the BoJ maintains QE and record-low interest rates and shows no inclination toward tightening monetary policy. The Fed’s talk towards the end of the week is awaited.

  4. The USD/JPY pair rallied upwards, supports the continuation of the bullish trend on the intraday and short-term basis, on next targets to reach 137.561 and followed by 138.139. Bullish trend scenario will remain active unless breaking 135.692 and holding below it.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.19416 and 1.19970.

-        Support line of 1.17624 and 1.17070.

Commentary/ Reason:

  1. Sterling was little changed at $1.18145, renewing the five-week low of $1.17825 recorded last Friday.

  2. Investors fear inflation in Britain at a stratospheric 10.1% will lead the BoE to keep hiking and force a recession. A faster tightening cycle from Britain’s central bank adds to downside risks to the UK economy at a time when citizens are already being battered amid the worst cost-of-living crisis in a generation.

  3. The dollar also remains as favourite as dollar bulls tracked the rebound in the U.S. Treasury yields across the curve in the day. The benchmark 10year-yield touched 3% early on Monday.

  4. The GBP/USD pair continues to press on the price to achieve more expected decline in the upcoming period, on next target reaches 1.1762.

  5. Bearish bias will remain dominant on the intraday and short-term basis, taking into consideration that breaching 1.1941 will lead the price to achieve some bullish correction before any new attempt to decline.

GBPUSD