INTRADAY TECHNICAL ANALYSIS 28 FEBRUARY (observation as of 07:45 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.12042 and 1.12292.

-        Support line of 1.11231 and 1.10980.

Commentary/ Reason:

  1. The euro sank 1% to $1.11583, to start the week on a volatility breakout as tensions between Russia and Ukraine continued to agitate sentiment.

  2. The euro is under pressure again after a weekend of announcements saw a rush to haven currencies such as the U.S. dollar, Japanese Yen and the Swiss Franc.

  3. Investors also believe the war will deter the European Central Bank from any strong tightening moves in the near term.

  4. The EUR/USD pair traded today with bearish gap that put the price to fall under potential negative pressure in the upcoming sessions. These stretched moves lower have seen the price move below the lower band of the 21-day SMA based Bollinger Band.

  5. A sustained moved outside the band may indicate ongoing volatility and bearish momentum could unfold. Support may lie at the previous lows of 1.1123 and 1.1098.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.92930 and 0.93222.

-        Support line of 0.92346 and 0.92054.

Commentary/ Reason:

  1. The dollar was flat against the safe-haven Swiss franc on Wednesday, with heightened nervousness on the latest developments around Ukraine kept the pair fairly muted.

  2. The dollar was traded at 0.92580 franc, hovering just below the 1-week high recorded on Thursday.

  3. Safe haven was supported after Western nations announced fresh sanctions to punish Russia for its invasion of Ukraine, and President Vladimir Putin put its nuclear forces on high alert.

  4. The USD/CHF pair returns to rise strongly to breach 0.9293 and settle above it, to turn to rise and head to achieve gains that start by testing 0.9322.

  5. Therefore, the bullish bias will be suggested for today, supported by moving above the EMA50, noting that breaking 0.923 will press on the price to decline again and visit 0.920 initially.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 116.136 and 116.766.

-        Support line of 114.876 and 114.246.

Commentary/ Reason:                                        

  1. The dollar was at 115.526 yen in Monday trade, having climbed steadily from Thursday 3-week low.

  2. The pair is putting in a mixed performance on Monday as traders try to decide if the escalation of the war between Russia and Ukraine and the imposition of harsh sanctions on Russia by Western countries will drive risk-on or risk-off sentiment.

  3. Risk-off sentiment will put pressure on the dollar because it will encourage investors to seek protection in the safe-haven Japanese yen. While risk-on should boost the pair. Higher T-note yields also will undercut the yen.

  4. USD/JPY price action has stalled at current price level, as the pair continues to move horizontally. It needs to get positive momentum that assist to push the price to continue the rise and visit 116.136 that represents our next main target. Bullish trend scenario will remain valid conditioned by the price stability above 114.876, as breaking this level will press on the price to return to the correctional bearish track again.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.34157 and 1.34787.

-        Support line of 1.32897 and 1.32267.

Commentary/ Reason:

  1. Sterling was 0.30% lower to trade at $1.33688 on Monday, as Russia-Ukraine tensions kept the pair in check.

  2. The dollar has maintained its strength against major currency pairs as the unprecedented outcome of the conflict between Russia and the Ukraine continues to support the demand for safe-haven currencies.

  3. Tensions over the Russian invasion of Ukraine continue to rise, with Western nations announcing fresh sanctions against Russia and Russian President Vladimir Putin putting nuclear-armed forces on high alert.

  4. Rising bets for an additional interest rate hike by the Bank of England, provided a slight hope of support to the GBP/USD pair. Money markets are currently pricing in a 50bps rate hike from the BoE next month, after delivering two 25bps hike in the previous two meetings.

  5. The GBP/USD pair has broken a previous key support level. The pair may now languish within the 1.328 and 1.322 price levels, as the macroeconomic situation unfolds. Momentum indicators have switched to bearish trajectories though RSI signals limited downside potential.

GBPUSD