The pound needs to stay above the 1.27 handle as a break below it will deteriorate the short-term technical picture
EURUSD has been losing ground for the fifth day in a row on Thursday. The pair dipped to fresh two-month lows around 1.1625 in recent trading and remains on the defensive, suggesting the euro could extend the retreat and threaten the 1.16 support. As the daily RSI shows, the pair will likely suffer further losses before a local reversal takes place. In the short term, the path of least resistance is to the downside, while in a wider picture, the euro remains within the bullish trend but finishing September with decent losses after for months of gains in a row. The immediate resistance now arrives at 1.17 while the 20-DMA remains the key obstacle for bulls marginally above the 1.18 handle.
GBPUSD has slowed down its decline and has been consolidating around the 100- and 200-DMA since yesterday. The pair has settled around 1.2745, marginally above the opening levels, but struggles to show a more decisive bullish bias to proceed to recovery after the recent sell-off. On the downside, the pound needs to stay above the 1.27 handle as a break below it will deteriorate the short-term technical picture. As long as the prices stay above this level, downside risks are limited. The daily RSI is pointing slightly higher but the bias is too modest to bet on more sustained gains, at least in the immediate term.
USDJPY keeps rising for the fourth day in a row, extending its bounce from six-month lows around 104.00. The pair climbed to 105.25 in recent trading, and has neared the important 20-DMA as a result. Now, the dollar needs to make a clear break above this moving average that should turn back into support for the greenback to extend the rebound. In a wider picture, however, the pair remains within a bearish trend, being capped by the key moving averages. On the four-hour timeframes, USDJPY remains between the 20- and 100-SMAs but trending to the higher end of the range. On the downside, the immediate support comes at 105.20, followed by 105.00.
The cross remains bearish since the start of the month. The euro dipped under the 20-DMA on September 15 and is nearing the 100-DMA now. The prices are dangerously close to this significant moving average that arrives at 122.35 as a break below it could send the pair lower at an accelerated pace. On the other hand, the daily RSI is about to enter the oversold territory for the first time since mid-February, suggesting a bounce could be expected soon. If so, the initial upside target arrives at 123.20. followed by 123.80. These are intermediate resistance levels on the way to 124.00. On the four-hour charts, the common currency is following the descending 20-SMA that is getting flat, which implies a bounce as well.
USDCHF has been rising since last Friday, retaining a strong bullish tone on Thursday. The pair rose to fresh two-month highs around 0.9270 in recent trading. The daily RSI is bullish and is about to enter the overbought territory, suggesting the downside momentum could wane in the short term. On the hourly charts, the dollar continues to follow the ascending 20-SMA and doesn’t show any signs of the easing bullish impetus. In a wider picture, USDCHF is about to exit the downside trend that could be broken after a rise above the 100-daily moving average that arrives in the 0.9350 area.