EUR/USD
EUR/USD reached new highs in just beyond 1.16 the figure in past hours, paving the way for the continuation of the move up in the very short-term. While overbought conditions might spark some correction lower in the near-term, the underlying bullish bias remains unchanged. That said, the next hurdle is now located at the October 2019 peaks in the 1.1620/25 band. Looking at the broader picture, as long as the 200-day SMA, today at 1.1067, holds the downside, further gains in EUR/USD remains well on the table.
Investors are watching intensifying Sino-American tensions. US Jobless claims missed with 1.41 million. Five days and 200 pips of rises – with hardly any stop – is a rare sight for EUR/USD and a much-needed downside correction could be on sight. Apart from profit-taking, EUR/USD has reasons to correct downward – mostly based on safe-haven flows to the dollar.
GBP/USD
GBP/USD is trading around 1.27, down on the day. EU and UK negotiators confirmed little progress has been made in talks. Sino-British and US-Chinese tensions are weighing on sentiment. Pound-dollar is still benefiting from upside momentum on the four-hour chart and trades above the 50, 100, and 200 Simple Moving Averages. On the other hand, it set a lower high by failing to break above the weekly peak of 1.2770. Support awaits at 1.2670, the former triple top seen earlier in the month. Resistance is at 1.2715, a stepping stone on the way up, and then by July’s peak of 1.2770. Next, June’s top point of 1.2815 is the next level to watch.
USD/JPY
The USD/JPY pair is trading in the 107.10 price zone with the risk skewed to the downside. US Initial Jobless Claims could trigger a substantial move if the data comes diverges from expectations. The pair is neutral-to-bearish according to the 4-hour chart, as the pair is barely holding above a mildly bearish 20 SMA, while below the larger ones. Technical indicators, in the meantime, hover around their midlines with modest bearish slopes.
WTI
WTI (futures on Nymex) has picked up fresh bids in the European session and looks to retest the four-month highs of $42.51, underpinned by the risk-on market profile. The appetite for risk assets returned in Europe, as the upbeat earnings combined with the coronavirus vaccine hopes offset concerns over the US-China escalation. Therefore, the buying interest around the higher-yielding oil remerged. Tuesday’s top near $42.52 joins $42.00 to limit the quote’s nearby advances ahead of the said bearish pattern’s resistance-line, at $42.60 now. In a case where the oil prices remain strong beyond $42.60, February month low near $44.00 could regain market attention.
XAU/USD
Gold surrendered a major part of its intraday gains to fresh multi-year tops and has now retreated back below the $1775 level. The precious metal prolonged its recent strong bullish trajectory and continued gaining traction for the fifth consecutive session. Concerns that the ever-increasing COVID-19 cases could delay the economic recovery and worsening US-China relations continued benefitted the commodity’s perceived safe-haven status. The yellow metal shot to the highest level since September 2011 but started losing momentum just ahead of the $1890 level. A sudden pickup in the US dollar demand – though lacked any obvious catalyst – seemed to be the only factor that prompted some profit-taking amid extremely overstretched conditions on short-term charts.
