INTRADAY TECHNICAL ANALYSIS 20 APRIL (observation as of 8:00 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.09365 and 1.10005.

-        Support line of 1.07295 and 1.06655.

Commentary/ Reason:

  1. The euro added 0.20% to $1.08074, though still staying not far from last week's low of $1.07576, the weakest in about two years.

  2. The war situation in Ukraine has kept the euro pinned, but strength in European government bond yields boosted the euro’s interest rate differentials. The 10-year German bund yield Tuesday climbed to a 6-3/4 year high of 0.956%.

  3. Meanwhile hawkish Fed comments pushing for more sizeable interest rate hikes on Tuesday also pushed the U.S. T-note yields higher and supported gains in the dollar.

  4. The EUR/USD pair settles below 1.0800 level, with stochastic begins to overlap negatively, waiting to motivate the price to resume the expected bearish wave on the intraday and short-term basis, which its next main target located at 1.0729. The upper limit of 1.0936 represents the resistance level.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.95504 and 0.95866.

-        Support line of 0.94333 and 0.93972.

Commentary/ Reason:

  1. The greenback touched 0.95358 franc for the first time since June 2020 before changing hands 0.15% weaker at 0.95021.

  2. The Swiss franc hits a 22-month low early in the day, pressured by a strong dollar after large inflation figures strengthened market expectations of rate hike by the Fed and the start of its balance sheet run-off process.

  3. Weakness in stocks on the day also boosted the liquidity demand for the dollar, on top of the strength in T-note yields.

  4. The SNB meanwhile last week emphasized it would limit the franc’s appreciation, which act as a safe haven currency after Russia’s invasion of Ukraine.

  5. The USD/CHF pair rallied upwards, open to achieve more gains on the intraday and short-term basis, as the next target reaches 0.9550, followed by the round level resistance at 0.9600. Bullish trend will be suggested for the upcoming period conditioned by the price stability above 0.9433, as it act as support line.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 130.072 and 131.003.

-        Support line of 127.060 and 126.129.

Commentary/ Reason:                                        

  1. The dollar climbed to a fresh two-decade peak to the yen early on Wednesday, buoyed by more Federal Reserve officials pushing for sizeable interest rate hikes, while the Bank of Japan stepped into the market again to defend its ultra-low-rate policy.

  2. The greenback reached 129.399 yen for the first time since April 2002 before last trading 0.20% lower at 128.582.

  3. The Japanese pushed slightly higher, after the Bank of Japan said it would offer to buy an unlimited amount of 10-year Japanese government bonds on Wednesday, to rein in the rise in Japanese 10-year yields, which rose to as high as 0.25% in early trade, touching the upper limit of the target.

  4. The Japanese yen has been weakening for weeks against the dollar amid expectations the Bank of Japan will lag the U.S. Federal Reserve in normalizing monetary policy.

  5. U.S. Treasury yields meanwhile pushed higher, with 10-year yields touching 2.981% for the first time since December 2018, following the hawkish comments by Chicago Fed President Evans and St. Louis Fed President Bullard.

  6. The yen has also suffered from Japan’s position as a commodity importer and is the worst-performing Group-of-10 currency against the dollar. While a weak yen boosts Japanese exports, it inflates import costs for energy and food products that have already seen prices jump due to the war in Ukraine.

  7. The USD/JPY retreats after hitting 129.39, but intraday bias stays on the upside with 127.060 minor support intact. Current up trend should target 130.07 long term projection level next. On the downside, break of 127.06 minor support will bring deeper pull back. But near-term outlook will remain bullish as long as 126.13 resistance turned support holds.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.30496 and 1.30733.

-        Support line of 1.29730 and 1.29493.

Commentary/ Reason:

  1. The British pound was flat on Wednesday, continues to tackle the 1.3000 barriers as it trades at $1.30025.

  2. Inflation, growth worries and uncertainty stemming from a war in Ukraine kept the pressure on sterling.

  3. Meanwhile, hawkish Fed comments Tuesday pushed T-note yields higher and supported moderate gains in the dollar. 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.

  4. The GBP/USD pair struggling around the 1.3000 level, to get negative factor that supports the expectations of continuing the bearish trend, paving the way to head towards 1.2973 that represents our next main target. Holding below 1.304 is important to continue the suggested decline, as breaching it might next push the price to test 1.30733 areas.

GBPUSD