INTRADAY TECHNICAL ANALYSIS 30 MARCH (observation as of 07:30 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.11702 and 1.12349.

-        Support line of 1.09608 and 1.08691.

Commentary/ Reason:

  1. The euro rose 0.20% and was at $1.11092 on Wednesday, having jumped nearly 1% overnight to a two-week high, was supported by the hopes for a breakthrough in Russia-Ukraine peace talks.

  2. Heavily sold on fears of the economic fallout from war in Ukraine of late and nerves about the risk of the conflict spreading west, it has been a beneficiary of hopes for peace.

  3. Germany's benchmark 10-year Bund yield - the main gauge of European borrowing costs - hit its highest since early 2018 and 2-year yields turned positive for the first time since 2014, adding to the seismic shifts in global rates markets this year as inflation has surged.

  4. U.S. Treasury yields meanwhile paused their ascent.

  5. The improving market mood is also not allowing the greenback to gather strength and helping EUR/USD clings to its recovery gains.

  6. The RSI (14) has shifted into a bullish range of 60.00-80.00, which signals a fresh impulsive wave going forward. Should the asset rose to early March high at around 1.117, the major will start marching decisively towards monthly highs at 1.1233.

  7. On the flip side, euro bulls can lose strength if the asset drag towards March 28 low at around 1.096, followed by round level support at 1.087.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.93669 and 0.94239.

-        Support line of 0.92529 and 0.91959.

Commentary/ Reason:

  1. The dollar slipped 0.37% against the Swiss franc on Tuesday and was last bought 0.92765.

  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 and as the DXY falls below the 99.00 mark.

  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 towards lows of 0.9310s.

  4. The USD/CHF pair trades with clear negativity to approach the first waited target at 0.9265, and we expect to surpass this level to open the way to extend the bearish wave to reach 0.92 as a next negative station. The bearish trend will be suggested for the upcoming period unless the price rallied to breach 0.9346 and hold above it.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 125.475 and 127.820.

-        Support line of 120.785 and 118.440.

Commentary/ Reason:                                        

  1. The Japanese yen was traded at 121.904 per dollar, having staged a little recovery from Monday's low of 125.09, though the dollar was still up almost 7% against the yen for the month.

  2. The yen advanced, as a meeting between BoJ Governor Haruhiko Kuroda and Prime Minister Fumio Kishida adding to speculation about the level of official discomfort with a falling yen.

  3. The widening differential between a hawkish U.S. and dovish Japanese yields have caused the yen to weaken sharply since early in the week.

  4. The Bank of Japan increased its efforts to defend its key yield cap on Wednesday offering to ramp up buying of government bonds across the curve including through unscheduled emergency market operations. The 10-year JGB yield stood at 0.245%, right up against the BoJ's implicit 0.25% cap.

  5. Declining commodity prices on the day are also helping the yen, given Japan’s position as a major energy and raw materials importer.

  6. Hopes of a cease-fire in Ukraine meanwhile sparked a rally in stocks that reduced the liquidity demand for the dollar.  Lower T-note yields also weakened the dollar’s interest rate differentials.

  7. The USD/JPY pair is on correctional bearish trend, opening the way to head towards 120.785 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 on Wednesday, was last trading at $1.31113 as it bounced off the 1-week low recorded yesterday.

  2. The British pound has steadied today after a sell-off since Monday in the wake of comments by Bank of England Governor Andrew Bailey that indicated rate hikes may not be as aggressive as previously anticipated. But from now on, the market reaction might not follow the usual path in which the pound strengthens when rates rise. The BoE raised interest rates on March 17.

  3. The pound also was supported as the safe haven demand for the greenback wilted after Russia said it would sharply cut military operations near Kyiv and Chernihiv after negotiators from Ukraine and Russia wrapped up talks aimed at de-escalating the war.  The talks also could pave the way for a meeting between Russian President Putin and Ukrainian President Zelenskiy.

GBPUSD