INTRADAY TECHNICAL ANALYSIS 28 MARCH (observation as of 07:20 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.10805 and 1.11585.

-        Support line of 1.09245 and 1.08465.

Commentary/ Reason:

  1. The euro was last at $1.09613, down 0.18% on Monday to record a fresh 1-week low.

  2. The euro was weighed in recent days, under pressure because of the economic impact of the war in Ukraine.

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

  4. Despite euro's daily wild swings since last week, intra-day weakness suggests downside bias remains, a daily close below 1.0924, and bearish outlook is retained for further fall towards pivotal sup at 1.0846. Above 1.1080 may cap upside to 1.1158.

  5. Also potentially driving the dollar this week is Friday's non-farm payroll data in the U.S., though given the market is already positioned for an aggressive pace of rate hikes this year, its effect could be sightly muted. Inflation figures from major European economies and the eurozone are due from Wednesday. And for today, U.S. wholesale inventories, goods trade balance and Dallas Fed manufacturing business index are due.

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 jumped 0.35% against the Swiss franc on Monday, bounced back from the 2-week low touched on Friday. to last trade at 0.93396.

  2. The greenback was supported today, as the 10-year Treasuries yield rose to its highest since May 2019, with traders positioning themselves for an aggressive series of rate hikes from the U.S. Federal Reserve.

  3. A risk-off market mood meanwhile still benefitted the low-yielder Swiss franc, as investors assessing the fallout from an intensifying Russia-Ukraine conflict.

  4. The USD/CHF pair rallied upwards strongly after leaning on 0.925 level, as it found solid support there, to approach the key resistance 0.936 now, which urges caution from the upcoming trading, as breaching this level will lead the price to continue the rise and achieve additional gain to reach 0.942.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 123.953 and 124.878.

-        Support line of 120.587 and 118.146.

Commentary/ Reason:                                        

  1. The dollar rose 1.23% against the Japanese yen, was last at 123.491, its strongest since December 2015. It also has climbed more than 6% on the yen in the last 12 sessions.

  2. The Japanese yen slipped to a six-year low after the Bank of Japan stepped into the market to stop government bond yields from rising above its key target. The BoJ on Monday reinforced its super-loose policy by offering to buy as many bonds as needed to keep 10-year yields under 0.25%, after the 10-year JGB yield crept up to a six-year high of 0.245%.

  3. After the morning offer failed to push down yields, the BoJ made a second offer in the afternoon to buy unlimited amounts of JGBs with maturities of more than five years and up to 10 years. The two offers, which were the first since Feb. 10, underscored the BoJ's resolve to keep rates ultra-low, even as other central banks such as the U.S. Federal Reserve move toward rate hikes.

  4. Prospects of widening U.S-Japan interest rate differentials pushed the dollar soaring.

  5. High commodity prices are also hurting the yen as they contribute to a widening of Japan's trade deficit, given Japan’s position as a major energy and raw materials importer.

  6. From a technical perspective, RSI (14) on the daily chart is flashing extremely overstretched conditions and makes it prudent to wait for some near-term consolidation or modest pullback before positioning for any further gains. That said, some follow-through buying beyond the 123.95 area, or November 2015 peak would set the stage for a move towards reclaiming above 124.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.33157 and 1.33757.

-        Support line of 1.31216 and 1.30617.

Commentary/ Reason:

  1. Sterling was 0.23% softer at $1.31502 against the dollar.

  2. Traders weigh a cautiously dovish outlook from the Bank of England against February data that showed higher-than-expected inflation. The latest data showed consumer prices in the UK jumped 6.2% from a year earlier in February, the highest since March 1992 and above market expectations of 5.9%.

  3. While the dollar recovered its losses as T-note yields surged.

  4. Currency market activity in the pair continued to be relatively subdued, confirming the lack of clear directional trends. Intraday bias in GBP/USD remains neutral for the moment. On the upside, above 1.331 will resume the rebound. While on the downside, below 1.312 minor support will turn bias back to the downside for retesting 1.30 low. Firm break there might resume larger downtrend.

GBPUSD