INTRADAY TECHNICAL ANALYSIS 31 MARCH (observation as of 07:15 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.12241 and 1.13092.

-        Support line of 1.10539 and 1.09688.

Commentary/ Reason:

  1. The euro was at $1.11705, held at a one-month high against the dollar on Thursday, on rallying on hopes the war in Ukraine might enter a new de-escalating phase.

  2. It is up 1.6% so far this week. The euro has been one of the biggest winners over the past sessions, part of that reflects the positive news about the Russia-Ukraine tensions, with sustained euro gains would be dependent on further developments in Ukraine.

  3. Support in the euro also came as rising inflation pressures in the Eurozone pushed European bond yields high. German Mar CPI (EU harmonized) rose a record +7.6% y/y, stronger than expectations of +6.8%, sending its 2-year bond yield into positive territory for the first time since 2014.

  4. Meanwhile, a lower T-note yields Thursday weakened the dollar’s interest rate differentials.

  5. The EUR/USD pair head towards continuing the rise in the upcoming sessions, targeting testing 1.1224 level initially, which breaching it represents the key to rally towards 1.130 as a next main target. Therefore, the bullish bias will be suggested for today unless breaking 1.1054 and holding below it again.

  6. Also potentially guiding the euro are remarks by the ECB’s chief economist and eurozone unemployment figures both due later Thursday, and inflation figures on Friday.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.91912 and 0.91532.

-        Support line of 0.93144 and 0.93524.

Commentary/ Reason:

  1. The dollar was flat against the Swiss franc on Thursday and was last bought 0.92382, trying to claw back off the 3-week low recorded overnight.

  2. The greenback weakened amid an improved market mood courtesy of advancement in peace talks in Eastern Europe, while also underpinned by falling US Treasury yields.

  3. Headlines that Russia-Ukraine negotiations progressed, and the possibility of a Putin-Zelenskiy reunion, improved the market mood; chased traders out from dollars which lifted the prospects of the Swiss franc, dragging the pair down.

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 Japanese yen was traded at 121.499 per dollar, having staged about 1.7% recovery since Monday's low of 125.090, though the dollar was still up more than 6% on the yen in March.

  2. Short covering in the yen undercut USD/JPY on concern that Monday’s plunge might spark intervention in the forex markets from the BoJ. A meeting between BoJ Governor Haruhiko Kuroda and Prime Minister Fumio Kishida on Wednesday adding to speculation about the level of official discomfort with a falling yen.

  3. Also, the yen strengthened on increased safe-haven demand after the Nikkei Stock Index fell for second day.

  4. The widening differential between a hawkish U.S. and dovish Japanese yields have caused the yen to weaken sharply since early in the week. Higher commodity prices also have been a factor weighing on the Japanese yen - as Japan is a net importer of energy.

  5. The USD/JPY pair is on correctional bearish trend, opening the way to head towards 120.292 that represents our next negative target. Bearish trend will remain expected for the upcoming sessions, affected by the previously completed double top pattern.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.31829 and 1.32257.

-        Support line of 1.30445 and 1.30017.

Commentary/ Reason:

  1. Sterling was traded slightly higher at $1.31423 after the Q4 UK GDP growth exceeds analyst expectations.

  2. UK has recently released the final reading of the fourth-quarter GDP Growth Rate report, indicated that GDP increased by 1.3% quarter-over-quarter, compared to analyst consensus of 1%.

  3. GBP/USD is testing the resistance level at 1.318, to head towards the next resistance at 1.3225.

  4. On the support side, the nearest support level for GBP/USD is located at 1.3044. A move below that will open the way to the test of the support at 1.300.

GBPUSD