INTRADAY TECHNICAL ANALYSIS 22 MARCH (observation as of 07:10 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.10931 and 1.11545.

-        Support line of 1.09703 and 1.09089.

Commentary/ Reason:

  1. The dollar was broadly stronger and pushed the euro down 0.30% to $1.09814.

  2. The dollar moved higher after hawkish Fed comments. Gains in the dollar accelerated after Fed Chair Powell said the Fed would take the "necessary steps" to get inflation down, even if that means increasing interest rates more rapidly than currently anticipated.

  3. The euro meanwhile remains under pressure due to the ongoing war in Ukraine, which may dampen economic growth in the Eurozone and boost inflation.

  4. Flash manufacturing PMI surveys from Europe due later this week also will be the next hurdle for the euro.

  5. The EUR/USD has rejected the recent resistance line and sellers have returned to take price action back towards the mid-range of the channel. Oscillations within this consolidation channel will likely continue going forward. Momentum indicators have flattened in bearish territory.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.94238 and 0.94570.

-        Support line of 0.93162 and 0.92830.

Commentary/ Reason:

  1. The dollar erases overnight’s 1-week slump and rallied 0.36% against the Swiss franc on Tuesday, to trade at 0.93692.

  2. The franc eased against the greenback on worries over the U.S. rate hike campaign to stabilise inflationary pressures. 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.

  3. The USD/CHF buyers have found support and price action is now headed back towards the 0.942 resistance line. This price level is significant as it has represented an obstacle for buyers in the past. Momentum indicators remain bullish, and RSI is approaching overbought conditions once again.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 120.817 and 122.233.

-        Support line of 118.273 and 116.857.

Commentary/ Reason:                                        

  1. The dollar rose to its highest since 2016 against the Japanese yen on Tuesday, and last bought 120.435.

  2. The yen slumped, after a hawkish speech from Federal Reserve Chair Jerome Powell raised bets on higher U.S. interest rates and widened the policy gap on a dovish Bank of Japan. The Fed is started to raise interest rates, and the ECB will be ending asset-purchases sooner than expected, while the BOJ maintains its QE program and record-low interest rates.

  3. Higher T-note yields put pressure on the yen. The benchmark 10-year yields rose 14 bps and, at 2.0914%, the gap on anchored 10-year Japanese yields is the widest in more than 2-1/2 years.

  4. The USD/JPY pair has surged higher as buyers appear to have found support in mid-week trading. Given how strongly overbought the pair is, there is a high probability of at least a pullback in the near-term. RSI has moved well beyond the 70-resistance line.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.32537 and 1.33397.

-        Support line of 1.30817 and 1.29957.

Commentary/ Reason:

  1. Sterling eased 0.28% to $1.31272.

  2. The escalation of the Ukraine crisis has raised concerns over the growth of the European economy, putting pressure on the pound.

  3. While gains in the dollar accelerated after Fed Chair Powell said the Fed would take the "necessary steps" to get inflation down, even if that means increasing interest rates more rapidly than currently anticipated.

  4. The GBP/USD pair for now looks set to consolidate within the 1.308 and 1.325 price levels. A doji candle in yesterday’s trading signalled the stall of bullish moves and since, sellers have returned.

GBPUSD