The greenback refrained from a negative reaction to the report that showed the US industrial production rose just 0.4% versus +1.0% expected
EURUSD encountered resistance around the 1.19 handle earlier in the day and has retreated partially since then. Despite the recent correction, the pair remains in the green on the daily charts, edging higher for the fifth day in a row already. The daily RSI continues to point slightly higher but the bullish bias is too modest to bet on more robust gains in the short term despite the persisting dollar weakness and positive risk sentiment.
Still, the greenback refrained from a negative reaction to the report that showed the US industrial production rose just 0.4% versus +1.0% expected and +3.0% prior. In part, this is due to the fact that the US Empire manufacturing index came in at 17.0 in September, much higher than 6.8 anticipated.
GBPUSD climbed to five-day highs earlier in the session but failed to hold above 1.29 and trimmed intraday gains. On the hourly timeframes, the pair is nearing the 100-SMA, a break below which will send the cable into negative territory. In a wider picture, the pound is stuck between the key moving averages on the weekly charts this week but the bullish bias could lead to a break above the 200-weekly MA around 1.2930. In this scenario, the pair will retarget the 1.30 handle first. On the downside, there are strong support levels in the form of the 100- and 200-DMAs that will likely cap the pressure should the selling pressure reemerge.
USDJPY slipped to fresh September lows around 105.30 during the European hours after another failed attempt to hold above the 20-DMA on Monday. The dollar resumes the decline after the recent consolidation and could threaten the 105.00 handle if the selling pressure persists in the short term. However, as risk sentiment looks positive, the pair is unlikely to challenge this support any time soon. It looks like the pair may stage a bounce from the mentioned lows but the recovery potential looks limited as well. On the four-hour timeframes, the technical picture continues to deteriorate since yesterday, when USDJPY dipped under the key moving averages.
The cross dipped to six-day lows around 125.00 on Tuesday, extending the correction from local highs registered in the 126.50 region last week. The prices are now back below the 20-DMA while the daily RSI is pointing south, suggesting the selling pressure could intensify in the short term if the euro fails to turn the mentioned moving average into support. Still, the pair could resume the ascent toward 127.00 after the current correction that could be extended lower before the buyers reenter the game. Of note, EURJPY remains within a bullish trend despite the current retreat.
The Kiwi extends its recovery from six-day lows registered around the 0.66 handle. The pair has exceeded the 0.67 figure in recent trading, and it looks like the New Zealand dollar is forming a symmetrical triangle in the daily charts. If so, the prices could rise to July 2019 highs marginally below 0.68. However, the daily RSI shows too modest bullish bias, suggesting further gains could be limited. Besides, as the prices have corrected lower from intraday highs, the Kiwi is yet to confirm the latest breakout on a daily closing basis as profit-taking could intensify in the short term.