INTRADAY TECHNICAL ANALYSIS 1 MARCH (observation as of 07:00 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.12658 and 1.13065.

-        Support line of 1.11341 and 1.10935.

Commentary/ Reason:

  1. The euro resumed its decline, dropping 0.20% to $1.11957 on Tuesday, but well off the low of $1.11204 from the previous session.

  2. The euro has somewhat recovered post-invasion last week but remains under significant pressure from its global market effects.

  3. Monday’s comments from ECB Governing Council member Centeno weighed on the euro when he said the Eurozone could be vulnerable to stagflation in the wake of the Russian attack on Ukraine. Investors also believe the war will deter the European Central Bank from any strong tightening moves in the near term.

  4. Lower T-note yields on today however limited the upside in the dollar.

  5. The EUR/USD pair rebounded from a recent low at the 1.1134 support line. Bullish conviction appears to have given way to sellers at the start of the Asian session, therefore any rally attempt will be short-lived. Momentum indicators are bearish with downward trajectories.

  6. The macroeconomic calendar will include updates on US inflation and employment this week.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.92787 and 0.93247.

-        Support line of 0.91299 and 0.90839.

Commentary/ Reason:

  1. The greenback added rose 0.16% to 0.91821 franc, following Monday's 0.84% retreat.

  2. The safe haven Swiss franc pulled back after their biggest daily rallies in almost seven weeks against the dollar on Monday.

  3. Heightened nervousness on the latest developments around Ukraine kept the pair volatile.

  4. Safe haven was supported after Western nations announced fresh sanctions to punish Russia for its invasion of Ukraine, and President Vladimir Putin put its nuclear forces on high alert.

  5. Favouring the USD/CHF sellers are the bearish MACD signals and the pair’s lower highs marked since January 31. Hence, odds of a pullback towards the stated support line, near 0.913 can’t be ruled out.

  6. Alternatively, the USD/CHF pair's recovery moves will aim for the 50% Fibonacci level near 0.9278. Beyond which the upside momentum to January’s peak of 0.9324 will become imminent.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 115.731 and 116.060.

-        Support line of 114.667 and 114.338.

Commentary/ Reason:                                        

  1. The Japanese yen traded at 115.110, pulled back after registering a 0.46% advance overnight against the dollar.

  2. The dollar gains modestly on Tuesday as Asian stocks rose, sparking demand for the greenback.

  3. Though lower T-note yields limited the upside in the dollar.

  4. The pair was put in a mixed performance as traders try to decide if the escalation of the war between Russia and Ukraine and the imposition of harsh sanctions on Russia by Western countries will drive risk-on or risk-off sentiment.

  5. The USD/JPY first resistance would be February 25 daily high at 115.73. Breach of the latter would expose the 116.00 mark. On the downside, only below 115.00 would indicate a temporary top has been made and risk stronger retracement to 114.67.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.34549 and 1.34900.

-        Support line of 1.33411 and 1.33060.

Commentary/ Reason:

  1. Sterling was slightly higher on Tuesday at $1.34193.

  2. The pound was supported by higher oil prices amid worries over the crisis in Eastern Europe, while rising bets for an additional interest rate hike by the Bank of England also provided a slight hope of support 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.

  3. The dollar however, maintained its strength against major currency pairs as the unprecedented outcome of the conflict between Russia and the Ukraine continues to support the demand for safe-haven currencies. Tensions over the Russian invasion of Ukraine continue to rise, with Western nations announcing fresh sanctions against Russia and Russian President Vladimir Putin putting nuclear-armed forces on high alert.

  4. The GBP/USD pair supported the 1.334 price line, as a rally attempt will now be made. Conviction behind the move will be tested in today’s session. Price may be overextended in the short term and could rally back to the 1.3455 daily resistance level before declining.

GBPUSD