INTRADAY TECHNICAL ANALYSIS 14 APRIL (observation as of 06:45 UTC)


Important Levels to Watch for:

-        Resistance line of 1.09223 and 1.09568.

-        Support line of 1.08105 and 1.07760.

Commentary/ Reason:

  1. The euro gained ground on the dollar, rising 0.23% to $1.09137 on Wednesday.

  2. The euro bounced off its 5-week low after dollar was tumbling overnight, as U.S. yields paused their march higher and weakened the dollar’s interest rate differentials. 

  3. Short covering in the euro boosted EUR/USD ahead of Thursday’s ECB meeting. The euro also has support on reduced political concerns in France, with polls showing French President Macron holding point lead against Le Pen ahead of runoff elections in two weeks.

  4. Concerns about Russia-Ukraine situation meanwhile capped further advance in the euro.

  5. The EURUSD pair’s decline stopped near the support line, and bounced upwards strongly to breach the bearish channel’s resistance and close the daily candlestick above it, to head towards potential turn to rise, targeting 1.09223 followed by 1.1056 levels as next main stations.

  6. Bullish bias will be suggested in the upcoming sessions, taking into consideration that breaking 1.08105 support and holding below it will stop the positive scenario and press on the price to decline again.

  7. Traders were waiting for a European Central Bank meeting later in the day, to see whether they were in the same, more hawkish mood as their global peers. Money markets are pricing in about 70 basis points of interest rate tightening by December. A relatively hawkish outcome might give a bit of support to euro in the near-term.




Important Levels to Watch for:

-        Resistance line of 0.93747 and 0.94037.

-        Support line of 0.92807 and 0.92517.

Commentary/ Reason:

  1. The dollar slightly lower against the Swiss franc on Thursday, trading at 0.93302.

  2. Strength in stocks today curbed liquidity demand for the dollar, while a pause in T-note yields advance also weakened the dollar’s interest rate differentials.

  3. Though, the U.S. PPI data Wednesday that was stronger than expected was hawkish for Fed policy and pushed for some support of the dollar.

  4. 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.

  5. The USD/CHF pair to attempt to breach the key resistance 0.9374, reinforcing the expectations of continuing the bullish trend, which its next target extends above the psychological 0.9400 level.




Important Levels to Watch for Today:

-        Resistance line of 126.328 and 127.348.

-        Support line of 124.288 and 123.268.

Commentary/ Reason:                                        

  1. The dollar was on the back foot on Thursday after tumbling overnight, offering some relief to the bruised and battered yen.

  2. The pause in U.S. yields meant the Japanese yen managed a small recover. It was last at 125.400 per dollar, having fallen to a 20-year low of 126.311 on Wednesday.

  3. The yield on 10-year Treasury notes was at 2.7120%, compared to an over 3-year peak of 2.836%, before the U.S. data released on Tuesday showed inflation running less high than investors had feared.

  4. The prospect of fast and aggressive U.S. interest rate hikes and growing market expectations that the Bank of Japan will keep rates ultra-low in the near term continue to weaken the yen outlook.

  5. BoJ Governor Haruhiko Kuroda on Wednesday warned the recent rise in inflation driven by higher import costs could hurt the economy, stressing the central bank's resolve to keep monetary policy ultra-loose.




Important Levels to Watch for:

-        Resistance line of 1.31646 and 1.32227.

-        Support line of 1.29767 and 1.29187.

Commentary/ Reason:

  1. The British pound rose to $1.31399 on Thursday, its highest in a week against the dollar, after jumping 0.90% on Wednesday, its biggest daily percentage gain since June 2021, partly boosted by high inflation figures.

  2. Data on Wednesday showed no let-up for Britain after inflation hit a 30-year high of 7.0% in March from 6.2% in February, although this came a day after a lower-than-expected U.S. print had given some traders cause to hope policy would be tightened more slowly.

  3. High inflation pressures arising from soaring energy prices are hurting households' purchasing power and squeezing their finances, pressuring the BoE to tight faster. Markets expect the Bank of England to raise rates to 1% during the meeting on May 5th and see 140 basis points of hikes by year-end.

  4. While the Fed is expected to tighten monetary policy aggressively and deliver a 50bps rate hike this month, as the inflation rate hit 8.5% in March, the highest since December of 1981.

  5. More gains for the pound however were hampered, as geopolitical risks could again cap market optimism. Ukraine warned on Wednesday that Russia was ramping up efforts in the South and East as it seeks full control of Mariupol, while Russian President Vladimir Putin on Tuesday said peace talks to resolve its invasion of Ukraine had come to a dead end.