EUR/USD is trading around 1.1450, higher. While the currency pair is at the highest levels in three months, the RSI on the four-hour chart is still below 70 – outside overbought conditions. That implies further gains may be in store. EUR/USD is above the 50, 100, and 200 Simple Moving Averages, and momentum remains to the upside. Euro/dollar is trading above the previous high of 1.1452, which now turns to support. The next cushion is the daily low of 1.1410, followed by 1.1370, a stepping stone on the way up which converges with the 50 SMA. Further down, 1.1325 and 1.13 await it. Overall the greenback is pressured by a weaker tone surrounding the US Treasury bond yields. This coupled with a slight improvement in the global risk sentiment, as depicted by a modest rebound in the equity markets, further undermined the safe-haven USD.
The GBP/USD pair edged higher through the early European session and refreshed daily tops in the last hour, with bulls now eyeing to reclaim the 1.2600 mark. The pair once again managed to find decent support ahead of the key 1.2500 psychological mark and moved back into the positive territory amid the emergence of some fresh US dollar selling. The continuous surge in coronavirus infections in the US fueled concerns that the economic recovery will take much longer than initially expected and kept the USD bulls on the defensive. Despite the move up, the pair remains well within a broader trading range held over the past one week or so. This makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move.
The USD/JPY pair has now drifted back to the lower end of its daily trading range, with bears now awaiting a sustained break below the 107.00 round-figure mark. The pair failed to capitalize on its Asian session bullish spike to 1-1/2-week tops, instead met with some fresh supply near the 107.55 region amid some a broad-based US dollar weakness. The ever-increasing number of coronavirus cases in the US dampened prospects for a swift recovery for the domestic economy and kept the USD bulls on the defensive. The pair’s inability to capitalize on a move beyond a two-week-old trading range clearly points to persistent selling bias at higher levels. However, it will be prudent to wait for some strong follow-through selling below the 106.65-60 horizontal support before positioning for any further near-term depreciating move.
The USD/CAD pair edged lower through the early European session and was last seen trading near the lower end of its daily trading range, around the 1.3570-65 region. The pair failed to capitalize on its early uptick, instead was rejected near the 1.3600 round-figure mark amid the emergence of some fresh selling around the US dollar. The ever-increasing number of coronavirus cases in the US dampened prospects for a swift recovery for the domestic economy and kept exerting some pressure on the USD.
The AUD/USD pair started the new week with a small bearish gap and stretched lower toward 0.6970 area during the Asian session. With the greenback struggling to find demand during the European trading hours, the pair gained traction and pares its daily losses. As of writing, AUD/USD was posting small daily gains at 0.7001. If Wall Street pushes higher at the start of the week, the DXY could extend its slide and help AUD/USD edge higher. After losing as much as 0.4%, S&P 500 futures are now virtually flat on the day.