After some hesitation around the 100-DMA earlier in the day, EURUSD resumed the ascent and has been challenging the 1.10 barrier during the European hours. This is a critical area, where the 200-DMA lies, as a break above it on a daily basis will increase the possibility of another bull run to fresh highs. The euro has been on the rise for the fifth day in a row, however, the daily RSI remains in the neutral zone, suggesting the euro’s upside potential has not been exhausted yet at this stage. On the other hand, the pair has been capped by the mentioned moving average since late-March, so this level could stir the bulls and trigger a local profit-taking in the short term.
GBPUSD is unchanged on the day after a brief dip under the 1.22 handle. The pair remains capped by the 50-DMA that has now declined to the 1.2270 region. As long as the prices stay below this level, downside risks prevail. Should the cable fail to overcome the 1.2250 immediate resistance, it may dip below 1.22 and even extend losses to the 1.2070 region, where Monday’s lows lie. On the four-hour timeframes, the RSI is pointing north but the pair struggles to get back above the 50-SMA, suggesting the bullish impetus remains limited.
USDJPY is still in a tight range between the key moving averages. The technical picture on the daily charts remains unchanged these days. On Thursday, however, the dollar shows a modest upside bias following marginal losses seen yesterday. The key hurdle for bulls remains at 108.00. Above this level, the 100- and 200-DMAs arrive. Considering these barriers, the path of least resistance remains to the downside. Failure to hold above the 107.50 region in the near term could send the pair to the 20-DMA around 107.00. As long as USDJPY remains above this level, bearish risks are limited.
The cross has been rising since yesterday and extended gains to late-March highs at 0.90 in recent trading. Unless EURGBP makes a clear break above this psychological level, it could resume the decline from the current levels that are looking attractive for local profit-taking. The daily RSI is about to enter the overbought territory, suggesting the bullish momentum could be exhausted soon. Should the 0.90 handle act as a barrier for bulls, the pair will first target 0.8980 in its downside correction. On the upside, a break above this level will shift market focus to fresh highs around 0.9030.
USDCHF proceeded to recovery on Thursday after a plunge witnessed yesterday. The pair has regained nearly half of Wednesday’s losses and stays shy of the 50-DMA around 0.9690 that turned into resistance recently. In a wider picture, the dollar’s bullish momentum remains capped by the 200-DMA for nearly two months already, and the pair will hardly manage to challenge this moving average any time soon. Furthermore, USDCHF got under the 200- and 50-DMAs on the four-hour timeframes, suggesting the recovery potential remains weak.