Free Trial

EURUSD Pierces Key 1.1076 Resistance, EURAUD Highest Since October 2020

FOREX
  • 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.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.