INTRADAY TECHNICAL ANALYSIS 24 MARCH (observation as of 07:30 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.10805 and 1.11585.

-        Support line of 1.09245 and 1.08465.

Commentary/ Reason:

  1. The euro hovered at $1.09812, down 0.16% on Thursday, fails to extend late Wednesday’s corrective pullback.

  2. The dollar posted moderate gains as a slump in stocks boosted the liquidity demand for the dollar. The dollar also was supported by the general strength after comments from Fed Chair signalling a 50bps rate hike in May prompted a rush to the dollar.

  3. Meanwhile the euro was kept under pressure on concern that the ongoing war in Ukraine will undercut Eurozone economic growth and cause spikes in commodity prices that further stoke inflation pressures.

  4. U.S. President Biden will meet with EU leaders Thursday in Brussels, and they are expected to announce new sanctions against Russia for its invasion of Ukraine. 

  5. The EUR/USD struggles to holds 1.1000 threshold during today earlier session, despite the latest rebound. Hence, the EUR/USD bears are ready to challenge the weekly low surrounding 1.092. A clear downside break will make the quote vulnerable to refresh yearly low, currently around 1.08.

  6. On the flip side, should the EUR/USD prices rise past 1.108, a broad horizontal area from late January, around 1.115, will be in focus.

  7. Flash manufacturing PMI surveys from Europe due Thursday will be the next hurdle for the euro.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.93603 and 0.93867.

-        Support line of 0.92750 and 0.92487.

Commentary/ Reason:

  1. The dollar rallied 0.23% against the Swiss franc on Thursday, to trade at 0.93261.

  2. The franc eased against the greenback on worries over the U.S. rate hike campaign to stabilize inflationary pressures. The odds of Fed’s faster, and more rate hikes also seem to put a floor under the price.

  3. However, a a risk-off market mood, benefitted the low-yielder Swiss franc, as investors assessing the fallout from an intensifying Russia-Ukraine conflict. Risk-aversion is back, as reflected by global equities, which could not shrug off Russia-Ukraine tensions.

  4. The USD/CHF buyers have found support and price action is now headed back towards the 0.936 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 121.919 and 122.631.

-        Support line of 119.615 and 118.903.

Commentary/ Reason:                                        

  1. The Japanese yen keep nursing heavy losses against the dollar, as rising U.S. yields and a deteriorating trade balance sucked cash out of Japan.

  2. The yen was traded at 121.676 per dollar, pinned just below a fresh six-year low of 121.710 touched earlier in the day.

  3. The brutal selling of yen was as investors expect the Bank of Japan to lag way behind policy tightening by other major central banks fighting inflation. An ever-more hawkish sounding U.S. Federal Reserve has further widened that policy gap with the Bank of Japan.

  4. Uncertainties over energy security in Europe also weighed on the yen. Russia's President Vladimir Putin said on Wednesday his country would seek payment in roubles for gas sales to "unfriendly" countries in retaliation for Western sanctions against its invasion of Ukraine. Russia has put Japan on its "unfriendly" nation list along with the United States, European Union member states and others.

  5. High commodity prices are bad news for the yen, as Japan imports the bulk of its energy, widening the country's trade deficit. Japan accounted for 4.1% of Russia's crude oil exports and 7.2% of its natural gas exports in 2021.

  6. The USD/JPY pair continues to find support in mid-week trading, with strong buying activity driving price action in yesterday’s trading. In the last 13 trading sessions, a bullish bias has dominated the session and driven price action higher. Momentum indicators suggest the pair is strongly overbought.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.33157 and 1.33757.

-        Support line of 1.31216 and 1.30617.

Commentary/ Reason:

  1. The sterling was flat on Thursday against a broadly stronger dollar. It slipped from a 3-week high overnight and was marginally softer on Thursday at $1.31987 even though February inflation was a little hotter than expected.

  2. The latest data showed consumer prices in the UK jumped 6.2% from a year earlier in February, the highest since March 1992 and above market expectations of 5.9%. As a consequence, money markets are raising bets the Bank of England will further hike interest rates in the coming months.

  3. Currency market activity continued to be relatively subdued, confirming the lack of clear directional trends.

GBPUSD