INTRADAY TECHNICAL ANALYSIS 13 APRIL (observation as of 07:20 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.09019 and 1.09343.
- Support line of 1.07971 and 1.07647.
Commentary/ Reason:
The euro dropped to $1.08113 overnight to a five-week low and hovered nearby at $1.08390 in the Wednesday session.
The dollar turned slightly lower after T-note yields fell as inflation concerns eased when U.S. core CPI rose less than expected.
However, the euro remains weighed, as Putin's remarks on Tuesday were a major driver of the pair, as the prospects for peace in Ukraine seemed to darken. Russian President Vladimir Putin's description of on-and-off peace negotiations as "a dead-end situation" on also put a weight on the euro, which have been vulnerable to concern about the war's economic fallout.
The EU has yet to agree any embargo on Russian oil over the war in Ukraine, but some foreign ministers have said the option is under discussion.
EUR/USD was also under pressure after the German Economic Institutes cut their 2022 German GDP estimate, and after German April ZEW investor confidence fell to a 2-year low.
EUR/USD has turned south, once again, after having failed to hold above 1.0900 on Monday. The technical picture is bearish, as the daily chart shows that the pair has extended its slump well below bearish moving averages. At the same time, technical indicators turned south within negative levels, reflecting increasing selling interest. The pair has a strong static support area at around 1.0797, the next near-term bearish target.
Market focus will shift their attention to the ECB policy meeting due later this week, where money markets are pricing in about 70 basis points of interest rate tightening by December.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.93747 and 0.94037.
- Support line of 0.92807 and 0.92517.
Commentary/ Reason:
The dollar rose against the Swiss franc on Wednesday, trading at 0.93358.
The ongoing rally in U.S. bond yields has boosted the dollar, with U.S. Fed officials remained consistent in their monetary tightening stand.
The franc meanwhile garnered some support on ongoing geopolitical strife, which helped prompt the flight to safety. Ukraine said it expects Russia to launch a huge new offensive soon in the eastern Donbas region, while Kremlin blamed Ukraine for derailing peace talks and said that on-and-off peace negotiations "returned to a dead-end situation.
The USD/CHF pair attempted to break 0.9280 level again but rebounded to hold above it, to keep the positive scenario valid for the upcoming period, supported by stochastic current positivity, waiting to motivate the price to breach 0.9374 to open the way to head above 0.9400.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 126.328 and 127.348.
- Support line of 124.288 and 123.268.
Commentary/ Reason:
The dollar continues to soar against the Japanese yen, as it rose to its highest since year 2002.
The greenback was last bought at 126.080 yen, hovering just off the intraday high of 126.218, its highest in more than 10 years.
USD/JPY remains elevated today as a jump in the 10-year T-note yield to more than 3 years high hammered the yen, as market players prepare for Fed’s aggressive tightening.
Japan's yen meanwhile has been hurt by the Bank of Japan's commitment to maintaining ultra-easy policy. The Bank of Japan has repeatedly intervened to keep benchmark bond yields around zero.
The latest warnings from Japanese policymakers, with Prime Minister Fumio Kishida saying on Tuesday that rapid currency moves are undesirable, failed to shore up the yen, which has shed over 3% this month. Statement by Finance Minister Shunichi Suzuki who said the government was watching currency moves with a sense of urgency also didn’t help.
The USD/JPY pair kept its stability, to resume its positive trades now, which keeps our bearish overview active, supported by stochastic current positivity, waiting to visit 126.328 that represents our next main target, with continuation of the bullish wave depends on the price stability above 125.00 and the most important above the main bullish trend line that rises now to 124.288.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.30656 and 1.30923.
- Support line of 1.29791 and 1.29523.
Commentary/ Reason:
Sterling slipped 0.18% to $1.29791 on Wednesday, to record a 1-year low against the dollar after the release of the UK’s inflation report
British pound remains under pressure against the dollar after UK inflation reports show that inflation rate increased by 7% year-over-year in March.
Meanwhile, Treasury yields have started to move higher after yesterday’s pullback, and the yield of 10-year Treasuries has already managed to get back above the 2.75% level. In case Treasury yields get back to recent highs, the greenback will get more support.
The pound had enjoyed a moment's respite overnight when cooler-than-expected U.S. inflation data eased the dollar’s momentum and set bonds rallying and investors hoping that price pressures might have peaked, however declined again following the Russian President Vladimir Putin's statement on its war on Ukraine pull the currency down.
Russian President Vladimir Putin's description of on-and-off peace negotiations as "a dead-end situation" on Tuesday also put a weight on the sterling, which have been vulnerable to concern about the war's economic fallout.
GBP/USD remains stuck near the important support level at 1.3000. This support level has already been tested several times in recent trading sessions and proved its strength. A move below this support level will open the way to the test of the support at 1.2952, nad possibly lower.
On the upside, a move above 1.3000 will push GBP/USD towards the resistance at 1.3065. A successful test of the resistance will open the way to the test of the next resistance level, which is located at 1.3092.
