INTRADAY TECHNICAL ANALYSIS 12 APRIL (observation as of 06:55 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 was last at $1.08794, little changed from its Friday close.
The euro was buffeted by politics, unable to hold onto its moderate overnight gains from its mini-relief rally after French leader Emmanuel Macron beat far-right challenger Marine Le Pen in the first round of presidential voting.
Gains in EUR/USD were also limited as the ongoing war in Ukraine may undercut economic growth and raise price pressures in the Eurozone.
Higher U.S. yields meanwhile boosted the dollar on the day, bolstered by prospects of aggressive rate hike. The 10-year T-note yield rose to a more than 3-year high.
U.S. inflation data is expected to be out later today stateside, with the White House warning that it expects the report to show inflation that is “extraordinarily elevated.”
Staying below 1.0967 and dropping below 1.0837 could activate a downside continuation. This could help the sellers to catch a larger drop.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.93747 and 0.94037.
- Support line of 0.92807 and 0.92517.
Commentary/ Reason:
The Swiss franc eased against the U.S. dollar as positive greenback sentiment curbed demand for the local currency. It was last stood at 0.93167, slipped 0.10%.
The franc jumped overnight on ongoing geopolitical strife, helped prompt the flight to safety. Ukraine said it expects Russia to launch a huge new offensive soon in the eastern Donbas region, despite ongoing peace negotiations.
The greenback meanwhile take turn on the day to strengthened as the 10-year bond yield spiked to a fresh three-year high ahead of the US Consumer Price Index data later today. Markets have considered the continuation of a hike in inflation, thus indirectly slashing risk appetite for other currencies, including another safe haven currency.
The USD/CHF pair couldn’t manage to hold for long time above 0.9374, to trade with clear negativity and press on the key support 0.9280 and breaking it will press on the price to test 0.925 initially. Breaching 0.9374 is required to confirm rallying towards 0.9400 mark that represents our next main target.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 126.107 and 126.688.
- Support line of 124.226 and 123.644.
Commentary/ Reason:
The dollar's gains have been most striking against the yen, and it was trading choppily at 125.681 yen on Tuesday, hovering just off the overnight intraday high of 125.765, its highest since June 2015. A move past that level would take the dollar to its highest against the yen since 2002.
USD/JPY remains elevated today as a jump in the 10-year T-note yield to a 3-1/4 year high hammered the yen, as market players prepare for Fed’s aggressive tightening.
The yen has been under the gun over recent months as the Bank of Japan has committed to ultra-easy policy even as many other major central banks, led by the Fed, have embarked on tightening monetary conditions. The Bank of Japan has repeatedly intervened to keep benchmark bond yields around zero.
The USD/JPY pair rallied upwards strongly to surpass our waited target at 125.00 and settles above it, opening the way to extend the bullish wave on the short term and medium-term basis, on its way to achieve additional gains that reach 126.107.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.30656 and 1.30923.
- Support line of 1.29791 and 1.29523.
Commentary/ Reason:
Sterling inched 0.15% lower to $1.30091, on its third consecutive days of decline.
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.
Focus now will shifts to the U.S. inflation later today and UK GDP due for release later this week.
Nevertheless, the greenback holds to gains, boosted by its safe-haven status and a jump in the 10-year T-note yield to a 3-1/4 year high.
The Federal Reserve is highly expected to raise the fed funds rate by 50bps this month, as the inflation rate probably hit 8.5% in March, the highest since December of 1981.
The GBP/USD pair fluctuates near 1.3000 level, falling under continuous negative pressure coming by the EMA50, to support the chances of breaking this level and confirm extending the bearish wave towards 1.2980.
