USDCHF could extend losses to 0.90 if the USD index fails to stage a bullish reversal after the FOMC meeting results
EURUSD is marginally higher on Wednesday, staying firmly above the 1.18 handle. However, the pair was rejected from intraday highs around the 1.1880 intermediate resistance earlier in the European hours and looked nearly directionless marginally below the 1.1860 region as of writing. As the common currency remains on the offensive these days, deriving support from dollar weakness, the 1.19 barrier remains in focus. This level capped bullish attempts on Tuesday and stays the key immediate hurdle for bulls.
The US retail sales data came in lower-than-expected but the greenback managed to bounce from lows following the release as traders shrugged off disappointing numbers ahead of the Federal Reserve decision due later today. Should the central bank strike a less dovish tone than anticipated, the greenback could further trim its losses.
GBPUSD has neared the 1.30 barrier in recent trading but was capped by the psychological resistance and retreated marginally. The pound has been receiving a boost amid more upbeat Brexit headlines coupled with a weaker dollar since the start of the week. However, if USD demand picks up any time soon, the pair may five up some gains. On the downside, bearish risks for sterling are limited as long as the prices stay above the 100- and 200-DMAs around 1.2730. The immediate support now arrives at 1.2930, followed by 1.29. On the four-hour timeframes, the RSI turned flat after the recent ascent, suggesting GBPUSD could lose some ground in the short term. Once above 1.30, the technical picture will improve somehow.
USDJPY extended losses to 104.80 as the dollar fell below the 105.00 handle for the first time since late-July. As of writing, the pair was changing hands just below this significant level that has now turned back into resistance. However, buyers could reemerge on the dip and send the greenback higher if the USD index catches a bid from FOMC later today. On the other hand, the daily RSI is pointing south but hasn’t entered the oversold territory just yet, suggesting there is still room for further downside. If so, a break below 104.80 could open the way toward long-term lows registered around 104.20 on July 31.
Gold prices continue to climb north gradually, staying above the 20-DMA since yesterday. The bullion rose to early-September highs around $1,973 in recent trading and has trimmed gains since then marginally. The daily RSI is nearly flat, pointing only slightly upwards, suggesting the bullish potential from here is limited. Furthermore, the inability to break above the mentioned local highs could bring the selling pressure back. In this scenario, the precious metal will likely dip under the mentioned 20-DMA. Anyway, the overall bullish trend remains intact as long as the prices stay above the 20-SMA in the monthly charts.
USDCHF stays on the defensive for the sixth day in a row on Wednesday. Moreover, the pair has been capped by the 20-DMA since last Friday while on the downside, the 0.9050 area acts as the key support that has been limiting the selling pressure since the recent rejection from the 0.92 handle on September 8. So, once below this support zone, the dollar could extend losses to 0.90 if the USD index fails to stage a bullish reversal after the FOMC meeting results. On the four-hour charts, the prices need to get back above the 20-SMA around 0.9080 to trim recent losses and regain the 0.91 figure. However, only a decisive break above the 100-SMA at 0.91 would be a sign of the easing selling pressure.