Risk aversion has intensified and sent the safe-haven yen higher across the board
The euro is trading lower on Tuesday but the downside pressure looks limited despite the recent pickup in demand for safe-haven currencies including the greenback. US stock futures are pointing to a lower open, which implies that another sell-off will take place on Wall Street after a long weekend. The common currency continues to cling to the 1.18 figure after a brief dip to nearly two-week lows below 1.1780. If the pair fails to stay above this area in the short term, a deeper correction could be expected. On the four-hour timeframes, the technical picture has deteriorated after the price got under the 200-SMA that now arrives at 1.1813. A daily close below 1.18 will mark the increasing downside risks.
The cable is the weakest among major currency pairs on Tuesday, being dragged down by rising uncertainty ahead of the looming Brexit talks. The pair clipped to the 1.3020 area for the first time in nearly a month and remains under pressure ahead of the opening bell on Wall Street. After the recent bearish acceleration, the 1.30 psychological mark came back into market focus. A break below this level could pave the way toward the 50-daily moving average around 1.2940. On the other hand, should the prices stay above this important support zone, the pound may stage a bounce and retarget 1.31. Considering the risks related to Brexit talks, the first scenario looks more likely at this stage.
USDJPY has accelerated the downside move following the recent consolidation as risk aversion has intensified and sent the safe-haven yen higher across the board. As a result, the pair dipped back below the 20-DMA and derailed the 106.00 handle once again. In a wider picture, the greenback is still capped by the 100-daily moving average while on the downside, the key support arrives at 105.10. As long as the dollar stays above this level, bearish risks are limited. On the four-hour timeframes, the pair is now stuck between the 100- and 200-SMA and could add to intraday losses in the short term before a bounce takes place.
Gold prices remain on the defensive, struggling to resume the recent ascent as the dollar retains a bullish bias these days. The precious metal is now nearing the $1,900 support zone, a break below which could trigger a more aggressive liquidation of long positions. For now, it looks like the prices will manage to bounce from this level and at least trim intraday losses, with the overall bullish trend remaining intact. On the upside, the bullion needs to turn the $1,940 region into support to shrug off the recent weakness, at least partially.
The pair climbed to early-August highs around 0.92 earlier in the day but failed to preserve the upside impetus and trimmed intraday gains as the safe-haven franc rose amid worsening investor sentiment. Despite the retreat, the dollar remains on the offensive since the start of a bullish correction from the lows just below 0.90. On the upside, there is strong resistance in the form of the 50-daily moving average that could prevent the pair from further recovery. So it looks like USDCHF will target the 0.9155 area next if risk aversion persists in the near term. on the four-hour timeframes, the prices remain well above the 200-SMA, a break below which will mark deterioration in the short-term technical picture.