Intraday Forex Friday, April 22 (EURUSD, USDJPY, etc). Dollar stands tall as Fed eyes fast hikes to battle heightened inflation.


Hi everyone. This observation is made around 07:50 UTC today, with 30 minutes time frames. The Resistance and Support Line were constructed according to Fibonacci retrenchment. Any discussion is welcomed.

Stocks tumbled on Friday, as traders ramped up interest rate hike bets following hawkish comments from central bank officials, as well as digesting the fallout for the global economy from lockdowns in China.
The dollar rose broadly on Friday, as US Treasury yields extended gain on the back of Fed Chair Powell hawkish tone that signaled moves to battle heightened inflation.
Market participants now look forward to the release of the flash PMI prints globally for a fresh impetus.

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  • The euro was flat at $1.08302 on Friday, given up Thursday's bounce and is not far above a two-year low, as traders reacted to Federal Reserve officials including Chair Jerome Powell offering further sign posting of aggressive interest rate hikes this year.​
  • Still, the euro was headed for a 0.14% weekly gain against the dollar.​
  • Hawkish Fed comments Thursday pushed T-note yields higher, strengthening the dollar’s interest rate differentials.​
  • Market also reeling from comments by the ECB officials that the central bank might start hiking euro zone rates as early as July. German two-year yields hit an eight-year high overnight.​
  • The EUR/USD pair bounced downwards after approaching the waited positive target at 1.0935, to settle below the EMA50, which hints heading to resume the main bearish trend. Continuation of the negative pressure and breaking 1.07300 will push the lower.​
  • Global PMI figures are due later today. The dollar may receive further support from safe haven demand if the April PMIs generate market concerns about the global growth outlook, especially since recent data have flattered the U.S. recovery.​
  • The euro meanwhile is nervous ahead of Sunday's presidential run-off vote in France.​
Important Levels to Watch for Today:​
  • Resistance line of 1.09365 and 1.10005.​
  • Support line of 1.07295 and 1.06655.​

  • The dollar was down 0.20% at 128.047 yen on Friday, but still on course for 1.50% weekly gains, and its seventh consecutive weekly gain.​
  • Higher U.S. yields hoist the greenback. While overnight Fed Chairman Jerome Powell said a 50 basis-point rate hike was on the table at the next meeting in two weeks, Japan is pinning its government bond yields near zero.​
  • A slump in Japan’s Nikkei on Friday boosted the liquidity demand for the Japanese yen on the day.​
  • Japan's core consumer prices rose at the fastest pace in more than two years in March, raising worries of higher energy and food cost. The core CPI jumped 0.8% in March from a year earlier, government data showed on Friday. Policymakers might try and strengthen the currency in order to relieve households squeezed by higher energy and imported food costs.​
  • Japan has been running trade deficits as energy import costs soar, further undermining the yen. While a weak yen boosts Japanese exports, it inflates import costs for energy and food products that have already seen prices jump due to the war in Ukraine.​
  • Intraday bias in USD/JPY remains neutral. Deeper retreat cannot be ruled out, but downside should be contained above 126.129 resistance turned support to bring another rally. On the upside, above 130.0 will resume larger up trend to 131.0 projection level next.​
Important Levels to Watch for Today:​
  • Resistance line of 130.072 and 131.003.​
  • Support line of 127.060 and 126.129.​

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