INTRADAY TECHNICAL ANALYSIS 26 APRIL (observation as of 07:00 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.07845 and 1.08121.
- Support line of 1.06951 and 1.06675.
Commentary/ Reason:
The euro rose slightly to $1.07306 against the dollar, remain pinned near the two-year low trough and its weakest level since the initial COVID panic of March 2020.
Lower U.S. Treasury yields give a slight retreat in the dollar, as worries over China’s economy added to fears of a faster-than-predicted increase in U.S. interest rates.
Though the dollar still managed to hold ground as investors sought safety due to uncertainties, despite French President Emmanuel Macron's comfortable election victory over far-right rival Marine Le Pen. Additionally, the EU is studying more sanctions on Russia, cutting oil imports from the country.
The next level of support for the pair sits at 1.0695 and 1.0667 to hold in the short term, especially as Euro interest rate expectations continue to grow. While the ECB is still behind the Fed, any indication that the ECB will tighten monetary conditions further will help stem any move lower, at least in the short term.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.96091 and 0.96306.
- Support line of 0.95395 and 0.95180.
Commentary/ Reason:
The dollar was flat on Tuesday, to trade at 0.95928 against the Swiss franc.
The pair remains elevated amidst a risk-off market sentiment, triggering a flight to safe-haven assets and bolstered by increasing odds of an aggressive Federal Reserve.
A retreat in U.S. 10-year Treasury yield on the day however, capped the dollar advance.
The USD/CHF remains bullish from a daily chart perspective, but the RSI reading just below 80 suggests the pair could be topping in the near term.
To the upside, the USD/CHF's first line of resistance would be the confluence of the major round figure at around 0.9600. A breach of the latter would expose at 0.9630. On the flip side, the USD/CHF first support would be with June 30, 2020, daily high, turned support at 0.9539, followed by at around 1.9518.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 128.896 and 129.423.
- Support line of 127.190 and 126.663.
Commentary/ Reason:
The dollar falls 0.20% versus the yen, to trade at 127.837 yen on Tuesday. The Japanese currency has managed a slight recovery this week from last week's 20-year low of 129.399.
The yen was strengthened against the dollar, on renewed buying interest amid slightly easing demand for the greenback due to softer Treasury yields.
The Japanese yen also paused its rapid decline on reports that Japan and the U.S. is to discuss the idea of coordinated currency intervention to stem further yen falls in last week's bilateral finance leaders’ meeting. The news came after Japanese Finance Minister Shunichi Suzuki described recent yen falls as “sharp” and said he agreed with U.S. Treasury Secretary Janet Yellen to communicate closely on currency moves.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.28374 and 1.28890.
- Support line of 1.26706 and 1.26190.
Commentary/ Reason:
The pound was at $1.27355, having hit its lowest since September 2020 overnight.
Sterling plummeted amid fears about the economic impact of China's COVID-19 lockdowns and as an aggressive pace of U.S. rate hikes sent investors scrambling for safety. Protracted Russia-Ukraine conflict also continue to weigh on the market mood.
The pound also has been hurt by last week's weak British retail sales and consumer-confidence data, with Bank of England comments signalled a possible slowdown in the expected upward movement of interest rates.
The GBP/USD shows oversold conditions in the short term with the RSI indicator staying below 30. The market mood, however, needs to turn neutral before sellers decide to book their profits. Hence, it's possible to see additional losses before the pair makes a correction.
On the downside, the first support of Sep. 23, 2020, low at 1.2675 and 1.2619 will be awaited. However, if the pair stages a rebound on improving sentiment, 1.2837 could be seen as the first resistance ahead of 1.2889.
