INTRADAY TECHNICAL ANALYSIS 21 MARCH (observation as of 07:40 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.11586 and 1.12042.
- Support line of 1.10109 and 1.09652.
Commentary/ Reason:
The euro was holding at $1.10546 on Monday, after bouncing 1.30% last week.
EUR/USD was under pressure due to the ongoing war in Ukraine, which may dampen economic growth in the Eurozone and boost inflation.
Flash manufacturing PMI surveys from Europe would be a hurdle for the euro this week. Europe is most exposed to lower supply from, and higher prices for, gas and agricultural imports from Russia and Ukraine.
Traders also awaiting Federal Reserve chair Jerome Powell's remarks later in the day and other central bank policymakers, including President Christine Lagarde this week for monetary policy clues.
The EUR/USD is climbing back towards the 1.115 resistance line as buyers attempt to form a rally. Sellers have returned in recent trading which may suggest that support is insufficient to break out of range. Momentum indicators are bullish with moderate upward trajectories.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.94238 and 0.94570.
- Support line of 0.93162 and 0.92830.
Commentary/ Reason:
The dollar rallied 0.23% against the Swiss franc on Monday, to last trade at 0.93380.
The major has witnessed an intensified sell-off after hitting a fresh 11-month high at 0.9460 on March 16.
The dollar however, stays supported as the odds of Fed’s faster, and more rate hikes seem to put a floor under the prices, while investors also assessed the fallout from an intensifying Russia-Ukraine conflict.
For downside, a pullback near the neckline at 0.9316 will bring fresh offers from the market participants, which will send the pair lower to February 24 high at 0.928.
On the flip side, bulls can take the charge if it drives towards March 16 high and 11-month high at 0.942 and 0.946 respectively.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 119.452 and 119.694.
- Support line of 118.968 and 118.726.
Commentary/ Reason:
The yen extended its decline on Monday, traded at 119.224 per dollar as it challenges the six-year trough of 119.396 touched on Friday.
The dollar is expected to climb further on the yen in the coming months as the gap between U.S. and Japanese interest rates widens. the U.S. central bank raised its key interest rate by 25 basis points last week for the first time since the pandemic.
Higher Treasury yields have helped lift the US dollar on the yen, where the Bank of Japan remains committed to keeping yields near zero.
Traders today awaiting Federal Reserve chair Jerome Powell's remarks and other central bank policymakers this week for monetary policy clues.
The USD/JPY pair has stalled at below the 119.45 resistance line, on waning bullish momentum. Given that momentum indicators reflect that the pair is strongly overbought, the current rally may not last, especially considering the smaller-bodied candles into the move.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.32292 and 1.32773.
- Support line of 1.30735 and 1.30253.
Commentary/ Reason:
The sterling was at $1.31580 against the dollar, off 0.15% with the escalation of the Ukraine crisis post the Russia's invasion of Ukraine has raised concerns over the growth of the European economy.
Sterling came under pressure, with investors awaiting speeches this week by several policymakers at the European Central Bank, including President Christine Lagarde, which could also play a role.
The GBP/USD pair attempted to breach the key resistance 1.3229 but couldn’t manage to hold for long time above it, as it begins today with bearish bias affected by stochastic negativity, to keep the price stuck between the key levels represented by the mentioned resistance and 1.307 support, to keep our neutrality valid until now until breaching one of the mentioned levels.
