INTRADAY TECHNICAL ANALYSIS 8 APRIL (observation as of 07:40 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:
The euro dropped 0.25% to a new one-month low of $1.08532 on Friday, hurt by new Western sanctions on Russia, and dragged down by uncertainty around the outcome of the French election.
The pair headed for around 1.40% weekly losses.
The European Union moving towards a ban on Russian coal set to take effect from August.
Risk of a populist upset in French presidential elections has also sent jitters through markets - dragging on French debt and the euro - ahead of the first round of voting on Sunday.
Higher T-note yields meanwhile supported gains in the dollar after the 10-year T-note yield rose to a new 3-year high of 2.671%. As well as a new hawkish comments Thursday from St. Louis Fed President Bullard, along with better-than-expected U.S. economic data on weekly jobless claims and Feb consumer credit.
Intraday bias in EUR/USD stays on the downside for retesting 1.0837 low first. Firm break there will resume larger down trend with next target is at 1.0772. On the upside, above 1.0957 minor resistance will mix up the outlook and bring recovery.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.93841 and 0.94451.
- Support line of 0.92621 and 0.92011.
Commentary/ Reason:
The Swiss franc extended its downtrend against the U.S. dollar to trade lower on Friday as the greenback strengthened amid positive U.S. economic data and Fed hawkish remarks.
The dollar rose 0.16% to trade at 0.93451 against the Swiss franc, on track to set around 0.90% weekly advance as it gradually climbing back for five consecutive days off the 3- week low recorded late last week.
The jump in U.S. bond yields has boosted the dollar, with U.S. Fed officials remained consistent in their monetary tightening stand.
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.
The USD/CHF pair attempts to breach 0.938 level, reinforcing the expectations of extending the bullish wave on the intraday and short-term basis, noting that the next positive target is located at 0.9445.
[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:
The dollar extended its gains against the Japanese yen, advanced 0.15% to last bought 124.082, hovering just below its highest in over a week at 124.227 touched earlier today and approaching last month near seven-year high of 125.090.
USD/JPY rallied on the day as the higher T-note yields undercut the yen, boosted by hawkish FOMC minutes meeting, and other Fed’s officials comments.
The stronger dollar, and an oil price easing with supplies being released from reserves, has redoubled pressure on the struggling yen. The Japanese yen is headed for around 1.20% losses for the week.
It has somehow steadied this month after tumbling in March, though still remains under pressure as the U.S. raises interest rates and the Bank of Japan is intervening in the bond market to keep rates low.
The USD/JPY pair shows more bullish bias to move and stays above 124.00 barrier now, reinforcing the expectations of continuing the bullish trend, and the way is open to head towards next waited target at 124.346. The EMA50 keeps supporting the suggested bullish wave, which will remain valid unless breaking 123.124 and holding below it.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.31323 and 1.31893.
- Support line of 1.30183 and 1.29613.
Commentary/ Reason:
Sterling was at the low end of its recent range at $1.30304 and headed for 0.30% weekly losses.
Investors’ sentiment towards the pound is negative, as shown by European and U.S. equities falling. Factors of Russia-Ukraine war, and the global central bank’s tightening monetary conditions in the middle of an elevated inflation scenario paint an ugly outlook for Q2 2022. The BoE had delivered its third straight rate hike in March, bringing borrowing costs to pre-pandemic levels.
The UK sanctions against Russian coal and oil imports keep the pound undermined. Focus now shifts to the U.S. inflation and UK GDP due for release next week.
Nevertheless, the greenback holds to gains, boosted by its safe-haven status.
The GBP/USD pair trades with calm negativity, falling under continuous negative pressure coming by the EMA50, to continue suggesting the bearish trend for today, which targets 1.3018 as a next station, with more bearish wave to reach 1.2961.
