USDJPY has been rising since the start of the week but hasn’t yet recouped losses witnessed on Friday
The dollar is up on the day along with US Treasury yields. The greenback had to give up some local gains after the ADP report showed that US private sector employment rose just by 428,000 in August versus +950,000 expected after July’s increase of 212,000 (revised from 167,000). The release pointed to a slow recovery in employment and possible weak key jobs data due on Friday.
As such, EURUSD rebounded a tad after the report but stayed on the defensive in the intraday charts. The euro was rejected from two-year highs around 1.20 and extended the retreat toward 1.1840 after a short-lived recovery. In recent trading, the pair dipped back below the 200-hour SMA as the USD index retains a bullish tone despite a widespread risk-on sentiment. The technical picture has deteriorated in the four-hour time frames after the common currency retreated below 50- and 100-SMAs. A break below the mentioned intraday lows could send the pair to 1.18 where buyers may reemerge.
GBPUSD extended losses to 1.3325 during the European hours, staying under pressure after a correction from 2020 highs registered around 1.3480 on Tuesday. The cable could threaten the 1.33 figure next if the pressure persists in the near term. as of writing, the prices were flirting with the 100-SMA on the hourly charts. Once below this moving average, the short-term technical picture will deteriorate further. However, the pound remains within the bullish trend in a wider picture and will likely resume the ascent after the current downside correction.
USDJPY has been rising since the start of the week but hasn’t yet recouped losses witnessed on Friday when the pair plunged from the 100-DMA and barely holds above the 105.00 handle. Now, as the greenback recovers across the board, the prices turned the 20-DMA into support and climbed to the 106.30 region but is yet to confirm the latest breakout on a daily closing basis. As risk sentiment remains positive across the global financial markets, it looks like USDJPY will score another bullish close today.
The Aussie has been grinding lower since the start of the day, correcting from long-term highs registered marginally above 0.74 on Tuesday. As a result of the recent rejection, the RSI has exited the overbought territory and pointing south while the prices are already threatening the 0.73 support. A break below this level could open the way for a more aggressive bearish correction, with the next target coming at 0.7280, followed by 0.7210. On the four-hour timeframes, the technical picture is getting bearish but the pair is yet to challenge the key moving averages below the 0.73 handle.
The cross extended losses to three-month lows on Wednesday amid a broad-based weakness surrounding the common currency. The pair dipped to the 0.8870 area and could threaten mid-May lows if the 0.8860 level gives up in the short term. the daily RSI continues to point south but hasn’t entered the oversold territory yet, suggesting there is further room for a bearish continuation at least in the short term. If EURGBP manages to hold at the current levels and initiate a recovery, the immediate resistance is now expected at 0.89.