INTRADAY TECHNICAL ANALYSIS 8 MARCH (observation as of 06:30 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.09477 and 1.09958.

-        Support line of 1.07879 and 1.07388.

Commentary/ Reason:

  1. The euro stay pinned near a 22-month low on Tuesday at $1.08607, after taking a beating and falling for six straight sessions.

  2. The common currency is down 4% on the dollar since Russia launched what it calls a "special military operation" in Ukraine where fighting is showing no signs of abating.

  3. Russia-Ukraine Peace talks have made scant progress and though Germany's opposition to a ban on Russian energy imports knocked oil futures from Monday's 14-year peak, analysts still expect the supply shock to hurt European growth.

  4. In addition to the risk aversion, renewed expectations for a dovish shift in the ECB’s policy outlook also weigh on the euro. The spectre of stagflation prompting economists to figure that policymaker might delay rate hikes until late in the year.

  5. The EUR/USD should remain on the back foot with the dollar holding its ground, with a reasonable chance the pair to test the pandemic low of $1.0688 this month.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.92902 and 0.93223.

-        Support line of 0.91864 and 0.91543.

Commentary/ Reason:

  1. The dollar remained elevated on Tuesday to trade at 0.92589, after jumped more than 1% overnight.

  2. The dollar stays supported as the odds of Fed’s faster, and more rate hikes seem to put a floor under the prices, even the market’s risk-aversion wave backed by the Ukraine-Russia headlines. A slump in stocks on the day also boosted the liquidity demand for the dollar.

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 yen fell 0.20% to 115.499 per dollar on Tuesday, added to another 0.50% decline overnight.

  2. The USD/JPY was higher on Tuesday as strength in stocks weakened the safe-haven demand for the yen. Also, higher T-note yields also weighed on the yen.

  3. 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.

  4. The yen also weighed as Japan's trade position is set to worsen given it is a major importer of energy and resources. Surging oil import costs had pushed Japan to its largest currency account deficit since 2014, knocking some of the lustre from yen as a safe haven.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.32273 and 1.32770.

-        Support line of 1.30667 and 1.30170.

Commentary/ Reason:

  1. The pound continued to trade lower against the U.S. dollar on Tuesday on persistent buying support for the greenback. It was last at $1.31057.

  2. The dollar rallied on safe-haven demand as global stocks fell on concern about the worsening situation in Ukraine. Russian invasion of Ukraine maintains market players rushing into safety.

  3. Currency traders are trying to assess how the escalation of tensions and its economic impact might alter the Bank of England’s and Federal Reserve’s rate hike path in the near term.

  4. The GBP/USD pair has plummeted further and is now testing the 1.306 price level. Momentum indicators suggest that a recovery could be underway as RSI begins a bullish momentum reversal.

GBPUSD