INTRADAY TECHNICAL ANALYSIS 23 APRIL (observation as of 05:15 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.20732 and 1.21029.
- Support line of 1.19772 and 1.19475.
Commentary/ Reason:
The euro rose 0.11% on the day to $1.20279 after dipping about 0.2% on Thursday.
The euro nursed losses after ECB President Christine Lagarde squashed expectations that policymakers will start to consider a tapering of bond purchases due to an improving economic outlook.
Improving conditions in Europe meanwhile buoyed sentiment. France said schools would reopen on Monday and domestic travel curbs in place since early April restricting people to within 10 km of their homes would end on May 3.
Data on manufacturing and services activity in both the U.S. and Germany are due later today, which could support positive economic sentiment, but the dollar and the euro are unlikely to move much as investors stick to the sidelines before the Fed's meeting.
The Fed's next meeting ends on April 28, and while no major policy changes are expected, investors are paying close attention to any comments about the chance of scaling back monetary easing in the future. Fed Chairman Jerome Powell is likely to repeat Lagarde's message that talk of tapering is premature, which would put downward pressure on Treasury yields and cap the dollar's gains against most currencies.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.91998 and 0.92202.
- Support line of 0.91338 and 0.91134.
Commentary/ Reason:
The dollar was little changed at 0.91670 Swiss franc.
The positive outlook for the dollar wobbled as Treasury yields slipped. The dollar weakened on news of the proposal of a tax hike for high earners by the President Biden.
Investors will now look to the U.S. Federal Reserve's meeting next week for new trading cues.
Demand for the safe-haven greenback however is still favoured by some due to persistent concerns over a resurgence of COVID-19 and global lockdowns, although the decline in the Treasury yield capped optimism.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.39494 and 1.39987.
- Support line of 1.37899 and 1.37407.
Commentary/ Reason:
The British pound was quoted at $1.3842 on Friday, rose for the second time in the week after three consecutive days of losses.
The sterling optimism also came as the U.S. Treasury yields retreated on the day, dragging the dollar lower.
Data on manufacturing and services activity in both the U.S. and the UK and the retail sales figures for the UK are due later today, which could support positive economic sentiment for either of the countries.
