INTRADAY TECHNICAL ANALYSIS 23 FEBRUARY (observation as of 07:10 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.13908 and 1.14274.

-        Support line of 1.12725 and 1.12360.

Commentary/ Reason:

  1. The euro hovered around its 50-day moving average at $1.13265.

  2. The euro rebounded to trade marginally higher in the early session on Wednesday despite rising tensions between Russia and Ukraine that continued to agitate sentiment after Russian President Putin recognized two separatist republics in eastern Ukraine.

  3. The dollar fell modestly as a recovery in stock indexes curbed liquidity demand for the dollar. Losses in the dollar were limited by stronger-than-expected Tuesday’s U.S. economic data.

  4. The EUR/USD is languishing in no-man’s land, with rising selling pressure indicating a bearish bias but little conviction to drive price action. Having traded choppily this week, until there is a significant change in fundamentals the pair is likely to trade sideways. Momentum indicators have downward trajectories.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.92468 and 0.92777.

-        Support line of 0.91467 and 0.91157.

Commentary/ Reason:

  1. The dollar rebounded against the safe-haven Swiss franc on Wednesday, as whipsawed markets looked to get a handle on the latest developments around Ukraine, though heightened nervousness kept the pair fairly muted.

  2. The dollar climbed steadily to trade at 0.92071 francs, after a 0.58% overnight rally.

  3. The safe-haven franc waned a little as investors held on to hopes that Russia's deployment of troops to two breakaway regions in eastern Ukraine would be as far as Moscow went, while regarded initial Western sanctions as leaving room to avoid a war.

  4. The USD/CHF pair rallied upwards strongly yesterday to breach 0.9200 level and settles above it, which leads the price to achieve intraday gains that target testing 0.9246 level initially, making the bullish bias expected in the upcoming sessions.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 115.407 and 115.694.

-        Support line of 114.478 and 114.190.

Commentary/ Reason:                                        

  1. The dollar was at 115.046 yen in Wednesday trade, with the greenback having climbed steadily overnight from its near three-week low of 114.497.

  2. USD/JPY recovered and posted modest gains as deflation concerns weighed on the yen.  Friday’s data showed Japan Jan national CPI ex-fresh food & energy fell -1.1% y/y, weaker than expectations of -1.0% y/y and the steepest decline in 10-3/4 years. 

  3. Markets continue to look to get a handle on the latest developments around Ukraine, though heightened nervousness kept the major pair muted.

  4. The USD/JPY pair provided positive trades yesterday and moved away from the key support 114.478, but it faced solid resistance barrier formed at 115.407, which has been a hurdle to rallies in the past. Momentum indicators have flattened in neutral territory.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.36186 and 1.36450.

-        Support line of 1.35334 and 1.35070.

Commentary/ Reason:

  1. Sterling was marginally higher at $1.35909 on Wednesday, garnered some support on rising bets for an additional interest rate hike, though Russia-Ukraine tensions kept the pair in check.

  2. Looming Brexit and geopolitical risks capped further gains in the pound, despite the risk-on mood. Brexit talks to continue on a more regular basis while the UK leads in levying extra sanctions on Russia.

  3. Rising bets for an additional interest rate hike by the Bank of England, provided an additional lift to the GBP/USD pair. Money markets are currently pricing in a 50bps rate hike from the BoE next month, after delivering two 25bps hike in the previous two meetings.

  4. Recovery in stock indexes curbed liquidity demand for the dollar.

GBPUSD