The euro needs to turn the 1.18 figure into support on a daily closing basis in order to avoid a deeper downside correction
EURUSD turned marginally negative on the day in recent trading after a rejection just below the two-week highs registered in the 1.1830 area last Friday. As of writing, the pair was changing hands under the 1.18 handle while holding above the 20-DMA. A daily close below 1.18 could attract a deeper retreat in the short term after two weeks of gains. In a wider picture, the sentiment surrounding the common currency remains relatively upbeat, with downside risks being limited as long as the prices stay above the ascending 100-DMA, at 1.1570 today. In the immediate term, the euro needs to turn the 1.18 figure into support on a daily closing basis in order to avoid a deeper downside correction. Failure to regain bullish momentum could send the prices back under the 20-DMA around 1.1750.
GBPUSD was rejected from one-month highs in the 1.3060 area earlier in the day and turned flat, struggling for direction after a rally witnessed on Friday. In the immediate term, the pair needs to hold above the 1.30 handle that acts as the intraday support. If this level gives up any time soon, the 1.2980 intermediate support will come back into market focus. Once below, the key moving averages should cap the potential downside impetus. On the upside, the mentioned 1.3060 area is the key level for bulls, followed by the 1.31 barrier. On the four-hour charts, the technical picture remains upbeat as long as the pound stays above the 200-SMA.
USDJPY extends the bearish retreat since Friday, nearing the 20-DMA for the first time in a week. If this moving average fails to act as support, further losses could be expected. In this scenario, the key level to watch on the downside is the 105.20 intermediate support, a break below which could pave the way toward 105.00. The daily RSI is pointing south which coupled with the descending 20-DMA point to the dominating downside risks. In the hourly charts, the technical picture looks bearish as the dollar is back under the three moving averages, with the 20-SMA around 105.55 acting as the immediate resistance. The RSI in the same timeframes is pointing south but hasn’t entered the oversold territory just yet, suggesting the downside pressure will likely persist in the short term.
NZDUSD turned slightly negative on Monday after a strong rally seen late last week. The pair peaked at September 22nd highs around 0.6670 and remains slightly off local highs, refraining from a deeper bearish correction at this stage. The intraday low of 0.6644 acts as the immediate support while a break below this figure could open the way toward the 20-DMA. Meanwhile, the ascending 100-DMA continues to act as the key support, arriving around 0.6560 today. As the prices started to correct lower, the daily RSI turned south but the bearish slope is too modest to bet on more aggressive losses in the short term. as of writing, the Kiwi was changing hands around 0.6650.
USDCAD remains on the defensive in subdued trading following three consecutive days of gains. The pair is flat around 1.3130, struggling for direction on Monday. On the one hand, the dollar has been staying above the 1.31 handle for over a month already. As long as this level acts as support, downside risks are limited. On the other hand, the prices have broken back under the 20-DMA last week, which is a bearish sign, suggesting the selling pressure could intensify. However, as the daily RSI looks neutral after the recent decline, there is a chance that the prices will hold above 1.31 and stage a bullish bounce eventually.