EUR to Take Direction from ECB Leaders Meeting

👉 EUR/USD will be guided by Thursday’s ECB meeting and the outcome of the EU leaders summit on Thursday and Friday. The ECB is widely expected to make no monetary policy changes. ECB President Christine Lagarde said last week the ECB is unlikely to announce more stimulus measures for now because more time is needed to assess existing measures. Commonwealth Bank of Australia says EUR/USD can sustain a move beyond 1.1400 if EU leaders unanimously agree on the proposed EU-wide recovery fund at this week’s summit. Otherwise, EUR/USD is at risk of moving lower towards 1.1100. The EUR/USD is at 1.1312 early on Monday.

👉 The European Central Bank is expected to strike a cautious tone on the economic recovery at its meeting on Thursday, say KBC Bank analysts. They add that the ECB is unlikely to alter its policy stance now but it may stress that it stands ready to add further stimulus if needed to counter downside risks. Ten-year government bond yields rise across the board in the eurozone, except for Greece.

👉 Oil prices climbed after the Baker Hughes U.S. oil-rig number fell to an 11-year low of 181. U.S. WTI crude oil futures (August) increased 2.3% to $40.55 a barrel.

👉 USD/CAD extended the drop below 1.3600 despite the decline in oil prices. WTI fell nearly 1% to test the $40 mark amid talks of the OPEC+ easing the output cuts at its meeting due later this week.

👉 ICE U.S. Dollar Index was broadly flat on day at 96.66. Market sentiment was lifted by Gilead Sciences’ positive trial results of remdesivir in the treatment of Covid-19.

👉 Within the G10 fx basket, the aussie dollar was the outperformer, with AUD/USD heading back towards 0.7000. GBP/USD jumped to near 1.2670 levels amid the risk-on mood and UK stimulus optimism. The kiwi failed to benefit and traded flat around 0.6580.Spot gold price was down for a second session as it declined $4.00 (-0.3%) to $1,798 an ounce.

As we have observed earlier in the Currency Monitoring Chart, we discovered that AUD/USD lines are separated with the farthest distance. Screenshot taken as of 10:40 am.

Later this afternoon in our Currency Monitoring Chart as of 5:00 pm Philippine time. AUD retains its strength at +27.04 while NZD dives to the lowest point holding at -21.25. this means that AUD/NZD is bullish as of this writing.

INTRADAY MARKET INSIGHTS

USD/JPY Intraday: 
The pair has failed to post a sustainable rebound. Currently it has returned to levels around the lower Bollinger band calling for acceleration to the downside. The relative strength index remains subdued in the 40s showing a lack of upward momentum for the pair. The level of 108.20 is holding firmly as the key resistance. Upon reaching the immediate support at 106.00, the pair should sink further toward 104.50.

1st support – 106.00 (moderate)
1st resistance – 108.20 (major)
2nd support – 104.50 (minor)
2nd resistance – 109.65 (moderate)

EUR/USD Intraday:
The pair keeps trading on the upside after validating a Bullish Flag pattern. The relative strength index is still above 50 indicating a lack of downward momentum for the pair. With a bullish bias, the pair should proceed toward 1.1420 (around the high of June) and 1.1495 on the upside. Key support is located at 1.1170.

1st support – 1.1170 (major)
1st resistance – 1.1420 (minor)
2nd support – 1.1070 (moderate)
2nd resistance – 1.1495 (moderate)

AUD/USD Intraday:
The pair stays at elevated levels above both 20-day and 50-day moving averages. Meanwhile, the relative strength index is well directed above 50 indicating a lack of downward momentum for the pair. Therefore the technical configuration still favors a bullish bias. A break above 0.7040 would call for a further advance toward 0.7180. Key support remains at 0.6780.

1st support – 0.6780 (major)
1st resistance – 0.7040 (moderate)
2nd support – 0.6650 (moderate)
2nd resistance – 0.7180 (moderate)

The following is AUD/USD looking at 4 hour chart:

NZD/USD intraday: 
The pair remains on the upside after breaking above its consolidation range in late June. Currently, support is provided by both the 20-day and 50-day moving averages, while the relative strength index stands firmly in the 60s, indicating continued upward momentum. Unless the key support at 0.6370 is violated, the pair should climb to 0.6730 and 0.6910. Alternatively, a break below 0.6370 would trigger a pullback to 0.6185.

1st support – 0.6370 (major)
1st resistance – 0.6730 (major)
2nd support – 0.6185 (major)
2nd resistance – 0.6910 (major)

GBP/USD Intraday: 
The pair maintains a bullish bias above the key support at 1.2400. In fact, it is trading at levels above both the 20-day and 50-day moving averages, which are skewing upward. The relative strength index has climbed to the 60s, suggesting a bullish bias. Above the key support at 1.2400, expect an advance to 1.2815 and 1.2980. Alternatively, a break below 1.2400 would open a path to 1.2245 on the downside.

1st support – 1.2400 (major)
1st resistance – 1.2815 (major)
2nd support – 1.2245 (major)
2nd resistance – 1.2980 (moderate)

USD/CHF Intraday: 
The pair is trading within a bearish descending triangle pattern. Currently, it is capped by the 20-day moving average, which stays below the 50-day one. The relative strength index remains subdued in the 30s, signaling a bearish bias. As long as the key resistance at 0.9530 holds, the pair should proceed to 0.9355 and 0.9255 on the downside. Alternatively, above 0.9530, expect a rebound to 0.9650.

1st support – 0.9355 (major)
1st resistance – 0.9530 (major)
2nd support – 0.9255 (major)
2nd resistance – 0.9650 (major)

USD/CAD Intraday: 
The pair is capped by a declining trend line drawn from March. Despite a modest rebound, it remains trading at levels below both the 20-day and 50-day moving averages, while the relative strength index stays below the neutrality level of 50, indicating a bearish bias. Below the key resistance at 1.3720, expect a return to 1.3490 and 1.3300 on the downside. Alternatively, a break above 1.3720 would open a path to 1.3870 on the upside.

1st support – 1.3490 (major)
1st resistance – 1.3720 (major)
2nd support – 1.3300 (major)
2nd resistance – 1.3870 (major)

EUR/JPY Intraday: 
Target 121.77. The pair is supported by a rising trend line drawn from July 10. In fact, the 20-period moving average has crossed above the 50-period one, while the relative strength index has climbed above the neutrality level of 50, signaling a bullish bias. Above the key support at 120.50, expect an advance to 121.51 and 121.77. Alternatively, a break below 120.50 would trigger a decline to 120.05.

EUR/GBP Intraday: 
Bullish bias remains. The pair maintains a bullish bias above the key support at 0.8930. Currently, it is trading at levels above both the 20-period and 50-period moving averages, while the relative strength index stays above the neutrality level of 50, indicating a bullish bias. Unless the key support at 0.8930 is violated, the pair should rebound to 0.8991 and 0.9008. Alternatively, below 0.8930, expect a drop to 0.8901.