INTRADAY TECHNICAL ANALYSIS 5 APRIL (observation as of 06:40 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.10551 and 1.10915.

-        Support line of 1.09371 and 1.09007.

Commentary/ Reason:

  1. The euro drifted to $1.09693 on Tuesday, hovering just above the $1.09603 dropped in the previous session, the lowest since March 28.

  2. The euro languished near a one-week low weighed down by worries about economic damage from war in Ukraine. The prospect for the EU to ramp up sanctions on Russia weighed on the euro, to the dollar’s benefit.  The EU said Monday that work is underway on additional sanctions to penalize Russia for what appears to be war crimes in Ukraine.

  3. Meanwhile strength in T-note yields supported gains in the dollar, on expectations of rapid-fire U.S. interest rate hikes.

  4. Global markets are looking to Wednesday's release of minutes from the Federal Reserve's last policy meeting that could offer signs that the U.S. central bank could raise its benchmark overnight interest rate by half a percentage point next month.

  5. The EUR/USD pair breaking the yesterday’s support line to reinforce the expectations of extending the bearish wave on the intraday basis, with the next target is located at 1.0937, and  breaking it represents the key to rally towards 1.0900.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.93144 and 0.93524.

-        Support line of 0.91912 and 0.91532.

Commentary/ Reason:

  1. The dollar was last bought 0.92616 against the Swiss franc, gradually climbing back off the 3-week low recorded Thursday.

  2. The jump in U.S. bond yields has boosted the dollar, though the dollar optimism was undermined with headlines that Russia-Ukraine negotiations progressed lifted the support prospects of the Swiss franc.

  3. On the monetary policy front, the Swiss National Bank kept interest rates unchanged at -0.75% in its March meeting, despite doubling its year-end inflation forecast to 2.1%.

  4. The USD/CHF edges higher but remains trapped between the 0.9240-80 range. The USD/CHF first resistance would be followed by 0.9300, and a break would open the door toward January 31 daily high at around 0.935. On the downside, the USD/CHF first support would be the April 1 daily low at 0.920.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 123.375 and 124.081.

-        Support line of 121.963 and 121.257.

Commentary/ Reason:                                        

  1. The dollar weakened 0.17% to 122.572 yen, broadly tracking moves in long-term U.S. Treasury yields.

  2. The currency had steadied last week after a pummelling through March on the expectation of higher U.S. interest rates against anchored Japanese yields. The jump in yields has underpinned the dollar at the moment, given the Bank of Japan acted repeatedly last week to keep its bond yields near zero.

  3. The Japanese yen was supported today after Bank of Japan Governor Haruhiko Kuroda repeated his view that a weak yen benefits Japan's economy. Although rising fuel costs are expected to push consumer inflation close to the central bank's 2% target, Kuroda reiterated the BoJ's resolve to keep monetary policy ultra-loose.

  4. The rising prospects of fresh sanctions on Russia also lifted the Japanese yen as safe haven currency.

  5. Strength in Japanese stocks Tuesday curbed the safe-haven demand for the yen.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.32133 and 1.32853.

-        Support line of 1.30693 and 1.29973.

Commentary/ Reason:

  1. The pound traded slightly higher against the U.S. dollar on Tuesday on renewed buying interest of the local currency.

  2. Sterling hovered at $1.31224, up 0.10% from 1.31090 in the previous trading session.

  3. Sentiment remains cautious as Russia’s invasion of Ukraine continues to hold significant sway over how traders think the Bank of England will proceed in the coming months. Rate hike odds have increased meaningfully for the BoE in recent weeks, with hikes expected at each meeting from May through November.

  4. The expectation of a hawkish U.S. Fed meanwhile lend support for the dollar as the T-note yields remains high.

  5. Intraday bias in GBP/USD remains neutral as sideway trading continues. Further decline is mildly in favor with 1.3213 resistance intact. On the downside, firm break of 1.306 will resume larger downtrend.

GBPUSD