INTRADAY TECHNICAL ANALYSIS 7 APRIL (observation as of 07:30 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.09676 and 1.10328.

-        Support line of 1.08372 and 1.07720.

Commentary/ Reason:

  1. The euro recovered on Thursday, added 0.25% to $1.09178, after briefly touched a one-month trough of $1.08743 in the previous session.

  2. Europe's single currency benefited earlier from strong eurozone producer prices for February, which surged 31.4% year-on-year in February.

  3. The euro was of late has been weighed by a "double threat" from the economic impact of new sanctions on Russia and uncertainty about the outcome of the French election.

  4. An increasingly close-looking presidential election in France is another wildcard, and the risk of far-right candidate Marine Le Pen beating incumbent Emmanuel Macron has dragged on the euro and French debt ahead of Sunday's first-round vote.

  5. The dollar meanwhile was supported on a higher T-note yields, pushed on the hawkish FOMC meeting minutes overnight, that reinforced views the central bank may tighten aggressively.

  6. The European Central Bank will publish its equivalent minutes later today. Though the minutes from the ECB March meeting are unlikely to include such hawkish plans, traders will expect insight into policymakers' balancing act to manage soaring inflation and slowing growth.

  7. Intraday bias in EUR/USD remains mildly on the downside. Firm break of 1.0840 will resume downtrend. On the upside, above 1.1021 resistance will mix up the outlook and turn intraday bias neutral again.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.93841 and 0.94451.

-        Support line of 0.92621 and 0.92011.

Commentary/ Reason:

  1. The dollar was traded slightly lower 0.93201 against the Swiss franc on Thursday, though still hovering around the new 1-week high touched overnight, as it gradually climbing back or four consecutive days off the 3- week low recorded late last week.

  2. The jump in U.S. bond yields has boosted the dollar, on hawkish remarks by the Fed Governor Lael Brainard earlier in the week and following the FOMC meeting minutes yesterday.

  3. The U.S. dollar also continued to march higher as risk aversion remained prevalent as Western allies are expected to up the ante on their sanctions against Russia.

  4. The USD/CHF uptrend remains intact. With first resistance would be March 27 and 29 highs area around the 0.9370-80 region, which then would expose above the 0.9400 mark once broken. The lower bound of 0.9262 represents the support level.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 124.346 and 124.957.

-        Support line of 123.124 and 122.513.

Commentary/ Reason:                                        

  1. The dollar was trading flat against the Japanese yen on Thursday, last bought 123.818, though still hovering near a one-week high touched yesterday.

  2. The greenback remains firm, on Bank of Japan's conviction and repeated action last week to hold the yield on 10-year Japanese government bonds below 0.25%.

  3. USD/JPY also rallied as the higher T-note yields undercut the yen, boosted by hawkish FOMC minutes meeting.

  4. Rising prospects of fresh sanctions on Russia and weakness in Japanese stocks Thursday meanwhile limits some liquidity demand for the dollar and sparked some safe-haven demand for the yen.

  5. The USD/JPY is staying in consolidation and intraday bias remains neutral for the moment. If it to continue to rise and will be needs to surpass 124.34 to ease the mission of rallying towards the next positive target at around 125.00.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.31657 and 1.32047.

-        Support line of 1.30396 and 1.30007.

Commentary/ Reason:

  1. Sterling rose 0.25% higher on Thursday, to trade at $1.31007.

  2. Despite the broad greenback strength following the release of the FOMC meeting minutes, sterling pushed higher as rate hike odds from the BoE also have increased meaningfully in recent weeks, with hikes expected at each meeting from May through November.

  3. The BoE had delivered its third straight rate hike in March, bringing borrowing costs to pre-pandemic levels.

  4. A slippage below near March 16 low at 1.3039 Tuesday can strengthen the greenback bulls for the pair to may hit the downside by the psychological support at around 1.3000.

  5. On the flip side, the pair can march towards Tuesday’s high at 1.3165. Breach of the latter will drive the pair towards the round level resistance at 1.320.

GBPUSD