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EURUSD Pierces Key 1.1076 Resistance, EURAUD Highest Since October 2020

  • Despite multiple headlines regarding potential government intervention on First Republic Bank prompting volatile two-way trade in G10 currency markets, the USD index looks set to close with 0.4% losses as we approach the APAC crossover.
  • The weaker greenback has most noticeably been seen in EURUSD which has advanced 0.55% on Wednesday. Despite fading off the day's highs, the pair has still reversed the entirety of Tuesday’s pullback to breach resistance at 1.1076, the Apr 1 2022 high and recent Apr 14 high. This confirms a resumption of the primary uptrend and opens 1.1127, a Fibonacci retracement.
  • Note that moving average studies are in a bull-mode condition highlighting a rising trend. On the downside, key short-term support is unchanged at the 20-day EMA which intersects at 1.0930 today.
  • Interestingly, EUR crosses have seen an extension of recent strength amid the weaker equity backdrop and softer CPI prints from the likes of Australia and New Zealand. EUR/AUD has rallied through 1.67 to the upside for the first time since October 2020, opening the path to the 50% retracement for the 2020 - 2022 downleg at 1.7045.
  • Rising US yields and the recovery for major equity indices off mid-session lows has prompted a not insignificant 80 pip bounce for USDJPY with the pair now unchanged on the session, just below earlier highs of 133.94.
  • We noted that the prior move lower had seen the pair clear initial support at the 20-day EMA which intersected at 133.51. While the breach does suggest scope for a potential continuation lower, bulls will look favourably on the supportive price action late Wednesday. More significant support remains lower down at 132.02, the Apr 13 low, of which a break would strengthen overall bearish conditions. On the upside, key short-term resistance is at 135.13, the Apr 19 high, where a break is required to reinstate the recent bullish theme.
  • Focus turns to the Advanced reading of Q1 GDP from the US on Thursday, as well as Core PCE and March Pending Home Sales.

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