INTRADAY TECHNICAL ANALYSIS 4 APRIL (observation as of 08:00 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.11833 and 1.12314.

-        Support line of 1.10277 and 1.09796.

Commentary/ Reason:

  1. The euro drifted to $1.10360, weighed down by worries about economic damage from war in Ukraine

  2. Momentum came on discussion of an embargo on energy imports by the European nations, which would likely come with price pain since Russia supplies some 40% of Europe's gas needs. Germany said on Sunday that the West would agree to impose more sanctions on Russia in the coming days after Ukraine accused Russian forces of war crimes.

  3. Meanwhile the dollar made a firm start to the week as Treasury yields rose with expectations of rapid-fire U.S. interest rate hikes.

  4. The EUR/USD crawls downwards to gradually approach the bullish channel’s support line, and waiting for more decline in the upcoming sessions, noting that breaking the mentioned level will extend the bearish wave to reach 1.0980, and two-year trough of $1.0806.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.93144 and 0.93524.

-        Support line of 0.91912 and 0.91532.

Commentary/ Reason:

  1. The dollar was last bought 0.92481 against the Swiss franc on Monday, slipped slightly lower.

  2. While a rise in bond yields and expectation of higher U.S. interest rates supported the greenback, headlines that Russia-Ukraine negotiations progressed meanwhile improved the market mood; chased traders out from dollars and lifted the support prospects of the Swiss franc.

  3. Intraday bias in USD/CHF remains neutral for the moment. Further decline is expected with 0.931 resistance intact. On the downside, below 0.9191 will resume the decline. A firm break there will turn near term outlook bearish for 0.915 support and below. On the upside, above 0.931 resistance will flip bias back to the upside for 0.935 resistance.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 123.986 and 125.833.

-        Support line of 120.292 and 118.445.

Commentary/ Reason:                                        

  1. The yen has been squeezed back below 122 per dollar and last traded at 122.602, not far from its recent seven-year low of 125.090.

  2. The currency had steadied last week after a pummelling through March on the expectation of higher U.S. interest rates against anchored Japanese yields. The jump in yields has underpinned the dollar at the moment, given the Bank of Japan acted repeatedly last week to keep its bond yields near zero.

  3. A jump in T-note yields Friday weighed on the yen and pushed USD/JPY higher on Monday. The dollar remains supported ahead of a key U.S. Fed meeting for  the potential of a 50 basis-point interest rate hike.

  4. The USD/JPY pair is oscillating in a narrow range of the previous three trading sessions after recording a steep fall from March 25 high at 125.10.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.32133 and 1.32853.

-        Support line of 1.30693 and 1.29973.

Commentary/ Reason:

  1. Sterling hovered at $1.31275, up 0.11% from 1.31120 in the previous trading session.

  2. Sterling remains weighed on Monday as Russia’s invasion of Ukraine continues to hold significant sway over how traders think the Bank of England will proceed in the coming months. Rate hike odds have increased meaningfully for the BoE in recent weeks, with hikes expected at each meeting from May through November.

  3. The expectation of a hawkish U.S. Fed meanwhile lend support for the dollar as the T-note yields remains high.

GBPUSD