EURJPY extends the recovery after a brief plunge below the 100-DMA at the start of the week
EURUSD has been on the offensive since Monday, deriving support from a broad-based weakness in USD demand. As a result, the pair briefly jumped above the 1.17 handle for the first time in nearly a week but failed to confirm the latest breakout and has retreated slightly since then, showing the euro still lacks upside momentum and could resume the decline after a short-lived correction once dollar demand reemerges at more attractive levels. On the other hand, the daily RSI is pointing north in the neutral territory, suggesting EURUSD could at least retain its bullish tone in the short term. In a wider picture, the key upside target for the euro arrives at 1.1780 where the 20-DMA lies.
GBPUSD
The cable is slightly higher on Tuesday after yesterday’s rejection from the 1.2930 region. Despite the bullish bias, the pair struggles to regain the 1.29 handle that acts as the immediate significant resistance for the time being. Furthermore, the upside potential has been capped by the descending 20-DMA since September 7, with downside risks persisting as long as the pound stays below this moving average. In a wider picture, the pair remains in a corrective mode after peaking marginally below 1.35 at the start of this month. On the downside, the key level to watch is 1.2740 where the 100- and 200-DMAs converge. As long as the pair remains supported by this area, bearish risks are limited.
USDJPY finished unchanged on Monday and resumed the ascent today, having climbed to two-week highs around 105.70 in recent trading. Despite the persisting bullish bias, the dollar still lacks momentum to make a more decisive bull run and challenge the 106.00 handle. Furthermore, the pair is yet to confirm a recovery above the crucial 20-DMA on a daily closing basis. If so, the pair could revisit 106.00 for the first time since September 14. On the downside, the immediate support arrives at 105.40, followed by 105.20 and 105.00. On the four-hour timeframes, USDJPY is stuck in a range between the moving averages and could spend some time in a consolidative mode around the current levels before deciding on further direction.
EURJPY
The cross extends the recovery after a brief plunge below the 100-DMA at the start of the week. The euro attracted demand on a dip to 122.40 and regained upside momentum as a result. On Tuesday, the pair climbed above 123.00, and extended gains to the 123.70 region last seen one week ago. If the prices manage to hold above the 123.30 area in the short term, the prices could revisit the 124.00 handle in the short term. The daily RSI reversed north and continues to point higher, suggesting the common currency will likely remain on the offensive so far. In a wider picture, the pair needs to make a decisive break above 124.40 in order to shrug off recent weakness.
XAUUSD
Gold prices retain a modest bullish momentum on Tuesday after a strong bounce from the 100-DMA seen yesterday. If this moving average that now arrives at $1,848 withstands the pressure, it could pave the way for a stronger rebound in the immediate term. as of writing, the bullion was changing hands around$1,885, slightly off the intraday high of $1,890 registered earlier during the European hours. The immediate resistance now arrives at $1,900. Once above this local hurdle, the yellow metal could revisit the 20-daily moving average in the $1,920 area. On the four-hour timeframes, XAUUSD is now supported by the ascending 20-SMA, suggesting the pair could at least retain the current upside momentum in the short term.
