INTRADAY TECHNICAL ANALYSIS 29 MARCH (observation as of 07:20 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:
The euro was kept steady against the dollar, traded slightly higher at $1.09919.
The euro saw support as the 10-year German bund yield rose to a 3-3/4 year high of 0.629%, though sentiment continued to be undercut as the war in Ukraine continues, which fuels economic growth concerns for the Eurozone.
The expectation of a hawkish U.S. Fed meanwhile lend support for the dollar as the T-note yields remains high.
The range-bound price action in EUR/USD appears to be loosening as it clears last week’s low and fresh developments coming out the U.S. may keep the exchange rate under pressure as the Federal Reserve shows a greater willingness to normalize monetary policy at a faster pace.
European consumer confidence data and U.S. job openings figures are due later in the day for more trading clues.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.93669 and 0.94239.
- Support line of 0.92529 and 0.91959.
Commentary/ Reason:
The dollar was flat against the Swiss franc on Tuesday, at 0.93337 and hovering just below the 1-week high touched overnight.
The greenback was still supported today, as the 10-year Treasuries yield rose to its highest since May 2019, with traders positioning themselves for an aggressive series of rate hikes from the U.S. Federal Reserve.
A risk-on market mood meanwhile weakened the Swiss franc, as talks between Ukraine and Russia officials will commence on Tuesday in Istanbul with hope that some possible resolution between the two nations can be achieved in the near term.
The USD/CHF pair rallied upwards strongly after leaning on 0.925 level, as it found solid support there, to approach the key resistance 0.936 now, which urges caution from the upcoming trading, as breaching this level will lead the price to continue the rise and achieve additional gain to reach 0.942.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 125.456 and 126.597.
- Support line of 121.763 and 120.621.
Commentary/ Reason:
The yen fought for a footing on Tuesday, after the currency fell as much as 2.5% at one point overnight to notch its biggest one-day drop since March 2020.
The Japanese yen recovering to 123.604 in volatile trade on Tuesday, though still 0.22% lower.
The Bank of Japan move to pin down bond yields pushed the yen to six-year lows against the dollar, which could add to the strains facing households and retailers by inflating already soaring raw material import costs. Unlike other major economies that are battling surging price pressures, inflation in Japan remains well below its 2% target.
The BoJ on Tuesday kept up its relentless quest to defend a key yield cap by offering to buy unlimited amounts of 10-year government bonds, putting even more downward pressure on the yen and testing its resolve to keep policy ultra-loose.
High commodity prices are also hurting the yen as they contribute to a widening of Japan's trade deficit, given Japan’s position as a major energy and raw materials importer.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.31829 and 1.32257.
- Support line of 1.30445 and 1.30017.
Commentary/ Reason:
Sterling was flat on Tuesday after fell to a 1-week low yesterday, was last trading at $1.30885.
The British pound has steadied today after a sell-off on Monday in the wake of comments by Bank of England Governor Andrew Bailey that indicated rate hikes may not be as aggressive as previously anticipated.
But from now on, the market reaction might not follow the usual path in which the pound strengthens when rates rise. The BoE raised interest rates on March 17 but it softened its language on the need for more increases.
The pound also lost ground against a strengthening dollar as concerns about a prolonged war in Ukraine boosted demand for safe-haven assets.
