EURUSD climbed to fresh one-month highs around 1.1380 on Tuesday. Now, the 1.14 barrier is back in market focus but further upside movement is in question now as traders may be deterred by the psychological barrier and proceed to profit-taking at the current levels. The daily RSI is pointing slightly upwards but the bias is too modest to bet on further gains today. The common currency may see a pullback before bulls reenter the game at more attractive levels and send the pair above 1.14 if dollar demand stays muted in the days to come.
GBPUSD reversed south following several failed bullish attempts around the 200-DMA that continues to act as strong resistance. As a result, the cable plunged decently on Monday and extended losses today, threatening the 1.2500 handle during the European hours. If this level withstands the selling pressure, a bounce should be expected. However, downside risks prevail in the short term, suggesting the pound may see deeper losses in the immediate term. Furthermore, the daily RSI is pointing south in the neutral territory, also pointing to a bearish near term outlook.
After the recent plunge to the 106.60 region, dollar demand picked up and brought the pair back above 107.00. However, USDJPY is yet to confirm a recovery on a daily closing basis as the bullish impetus looks limited at this stage. The prices have settled marginally above the 20-DMA that now arrives around 107.20. The greenback needs to hold above this level in the days to come in order to extend the recovery and exceed the 100- and 200-DMAs at 107.60 and 108.35, respectively. On the four-hour timeframes, the technical picture has been improving since July 10. However, the prices are now nearing the 200-SMA that could trigger a downside correction.
The cross rallied to one-month highs above the 122.00 handle in recent trading and remains elevated, retaining the upside bias after the recent bounce from local lows around 120.25. The euro extended gains to the 122.20 area that could trigger a downside correction if the pair fails to make a decisive break above this intermediate resistance in the near term. If so, the 122.00 figure could turn into resistance again. On the positive side, EURJPY remains well above the key daily moving averages that represent strong support levels.
USDCHF failed to extend its winning streak and turned negative on Tuesday following three days of muted gains. The dollar was rejected from the 0.9440 area yesterday and has been correcting lower since then. At the time of writing, the prices were flirting with the 0.94 figure which is the key level for further direction in the short term. A daily close below it will confirm the resurgence of a downside impetus and could open the way to fresh mid-March lows below 0.9360. On the upside, a recovery above 0.94 will bring the above-mentioned local highs back into market focus.
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