Intraday Forex Wednesday, May 27 (EURUSD, USDJPY, etc.) Dollar firms as Fed edging towards a discussion about tightening monetary policy.

This observation is made around 05:30 UTC today, with 30 minutes time frames. The Resistance and Support Line were constructed according to Fibonacci retrenchment. Any discussion is welcomed.

Global stocks pulled back from positive opening on Thursday as investors reacted to the release of Chinese industrial profits data that grew at a slower pace in April, after been supported earlier by a stabilized market sentiment amidst easing concerns over the U.S. Fed rate prospects.

Meanwhile, the dollar found support from emerging views the Fed is slowly but surely edging towards a discussion about tightening monetary policy.

Traders await crucial U.S. inflation data this week for the next trading cues.

I also does analysis for some other currencies. Read more on the website on TECHNICAL ANALYSIS and DAILY MARKET NEWS.

[EURUSD]

  • The euro traded at $1.21946 against the dollar, edging closer towards its 1-week low touched Friday.
  • The euro falling for a second straight session after the ECB Executive Board’s Director, Fabio Panetta said it was too early to taper its emergency bond buying programme.
  • The dovish ECB comments sent bund yields tumbling, which weighed on EUR/USD. The 10-year German bund yield fell to a 2-week low Wednesday of -0.212%.
  • The decline however was slowed down as the president of the European Commission said on Tuesday that the EU is on track to safely reopen society after the COVID-19 pandemic, adding the bloc is on track to reach its goal of vaccinating 70% of the adult population by the end of July.
  • EUR/USD volatility continues with buyers and sellers taking it in turn to dominate trading sessions. As such, the pair has now returned to the 1.216 support level, as sellers returned in yesterday’s session. Overall, the long-term bullish trend remains intact. Momentum indicators have stalled in bullish territory.
  • U.S. GDP and preliminary prices data is due later today, along with initial jobless claims, where a small decline is forecast. The PCE deflator will be even more closely watched as the preferred core inflation guide, due on Friday.

Important Levels to Watch for:​

  • Resistance line of 1.22630 and 1.22947.
  • Support line of 1.21604 and 1.21287.

[USDJPY]

  • The dollar rose to a 1-week high against the Japanese yen earlier on Thursday and was last stand at 109.056 per yen.
  • Dollar rose from emerging views the Fed is slowly but surely edging towards a discussion about tightening monetary policy.
  • Meanwhile for the Japanese yen, it is cautioned that market sentiment is likely to remain weak as Japan’s COVID-19 cases continue to be on the rise, while the vaccine rollout is slightly behind schedule.
  • The yen is also under pressure on lower bond yields after the 10-year Japan JGB bond yield on Wednesday fell to a 1-month low of 0.070%.
  • Market participants now await the monthly U.S. personal consumption report due on Friday to gauge inflationary pressure. U.S. gross domestic product, jobless claims data are due later today.

Important Levels to Watch for Today:​

  • Resistance line of 109.311 and 109.497.
  • Support line of 108.707 and 108.521.

[USDCHF]

  • The dollar traded lower against the Swiss franc on Monday, slipped 0.10% to trade at 0.89703, reversing overnight 0.35% gains.
  • The dollar was weighted by the inflation worries, lower U.S. Treasury yields and expectations of reduction in the Fed’s stimulus. Though still favoured by some due to persistent concerns over a resurgence of COVID-19 and global lockdowns.
  • The Swiss franc meanwhile were weighted as years of talks to bind Switzerland more closely to the EU’s single market collapsed on Wednesday, when the Swiss government ditched a draft 2018 treaty cementing ties with its biggest trading partner.

Important Levels to Watch for Today:​

  • Resistance line of 0.89988 and 0.90185.
  • Support line of 0.89352 and 0.89155.

[GBPUSD]​

  • The British pound stood at $1.41121 against the dollar, dipped to a week-low of $1.40911 on Thursday.
  • Dollar strength clipped the wings of the pound year-to-date gain which is up 3.2% as Britain’s vaccination drive rekindles its economy.
  • A higher 10-year T-note yield helped the dollar to climb higher against the sterling.

Important Levels to Watch for Today:​

  • Resistance line of 1.41741 and 1.41993.
  • Support line of 1.40925 and 1.40673

For more currencies analysis and other insight into the market, read more on the WEBSITE or click on TECHNICAL ANALYSIS and DAILY MARKET NEWS.

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Chief Analyst at Golden Brokers. https://goldenbrokers.my/en/blog

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Zulbahri Muhammad

Zulbahri Muhammad

Chief Analyst at Golden Brokers. https://goldenbrokers.my/en/blog

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