USDJPY is marginally lower on the day, struggling for direction after volatile trading seen on Monday
EURUSD derives support from the 1.1720 area and managed to come off August 12 lows. However, the subsequent recovery faded around 1.1770, sending the euro back to the lower end of the intraday range. Despite risk sentiment has improved somehow, capping dollar demand, recovery potential in the common currency remains limited as traders keep a cautious tone following a major sell-off across the markets seen at the start of the week. So, even as the greenback gave up some earlier gains, EURUSD will likely remain on the defensive in the short term, suggesting the prices could threaten the 1.17 handle once under the mentioned lows around 1.1720.
GBPUSD derives support from the 100- and 200-DMAs earlier in the day and managed to trim intraday losses as a result. Still, the pair remains on the defensive and could threaten fresh two-month lows below 1.27 if the mentioned moving averages give up. Short-term dynamics will depend on the general sentiment surrounding the greenback that in turn is affected by risk trends. Should market concerns reemerge, USD demand will pick up again. In this scenario, the cable will threaten the 1.27 support for the first time since late-July.
USDJPY is marginally lower on the day, struggling for direction after volatile trading seen on Monday when the pair briefly dipped to six-month lows and rebounded above 104.60 by the close. After the recent sell-off, the 104.00 handle came into market focus, as a break below this ley support could open the way for further losses in the short- to medium-term. As of writing, USDJPY was changing hands around 104.60, down 0.05% on the day. Once above the 104.85 intermediate resistance, bearish risks will recede. However, it looks like the path of least resistance for the greenback is still to the downside.
USDCHF keeps climbing for the third consecutive day on Tuesday. The dollar managed to hold above the 20-DMA and staged a bounce from the 0.9050 area. The pair climbed to nearly two-week highs around 0.9170 earlier in the day, clinging to the upper end of the intraday range. The daily RSI continues to point north, suggesting USDCHF could extend gains after some consolidation. In this scenario, the greenback could challenge the 0.92 barrier for the first time since September 8. On the downside, the immediate support arrives at 0.9120. Bearish risks remain limited as long as the prices stay above the 20-DMA that arrives at 0.91.
USDCAD jumped to August 12 highs around 1.3345 earlier in the day but failed to preserve gains and turned flat in recent trading as dollar demand has waned across the board while oil prices reentered the green territory, supporting the commodity currency. Despite the retreat, the pair could regain the bullish bias as the prices are holding above 1.33, refraining from a deeper correction following a strong rally witnessed on Monday. On the four-hour charts, the technical picture remains bullish, with the prices holding well above the key moving averages. As such, the path of least resistance remains to the upside at least in the near term.