The euro bounced from more than one-week lows around 1.1720 and extended gains to 1.1765
EURUSD edged higher in recent trading, having reclaimed the 20-hour SMA as support as dollar demand started to wane. Furthermore, the selling pressure surrounding the greenback has intensified after the official report showed that the US producer price index came in at 0.4% versus a gain of 0.2% expected. As a result, the pair bounced from more than one-week lows around 1.1720 and extended gains to 1.1765. Despite the recovery, the euro’s bullish potential looks limited, with downside risks persisting as long as the prices stay below 1.18. In the immediate term, the common currency needs to hold above the 20-DMA that arrives at 1.1745 to confirm the latest breakout. As of writing, EURUSD was changing hands marginally below the mentioned intraday high.
After a negative start for the day, GBPUSD reversed north amid a combination of the renewed Brexit hopes and a weaker dollar. As such, the pair rallied above 1.3035 in recent trading. The technical picture on the daily charts has improved after a recovery above the 1.30 psychological handle. Still, the pound needs to confirm the rebound on a daily closing basis in order to extend gains in the days to come. As the daily RSI has turned higher in the neutral territory, a bullish continuation could be expected in the short term. On the four-hour timeframes, the cable has created a long green candle, having exceeded the key moving averages. Now, the 1.30 figure acts as the immediate support while on the upside, the nearest resistance should be expected in the 1.3070-1.3080 area.
Following a brief pause on Tuesday, USDJPY resumed the decline today, extending losses to 12-day lows around 105.15. As the selling pressure persists, the dollar could challenge the 105.00 handle in the short term. In this scenario, the pair could stage a bounce from the 104.90 intermediate support that stopped the bears last week. Otherwise, more significant losses could be expected. Furthermore, the dollar dived back under the 20-DMA in recent trading, adding to the negative signs for the pair. On the weekly timeframes, USDJPY remains below the descending 20-SMA that continues to act as the key hurdle for bulls. However, the daily RSI is nearly neutral, suggesting the current selling pressure could recede somehow soon.
Gold prices reversed north after a muted start for the day, deriving support from the renewed weakness in the dollar. The bullion managed to exceed the $1,900 handle during the recovery but is yet to regain recent losses from above the $1,930 handle. Despite the recent bounce, the upside potential looks limited while bearish risks continue to persist at this stage. In the immediate term, gold prices need to hold above the descending 20-DMA around $1,900 in order to confirm the latest breakout. Otherwise, the $1,880 area will come back into the market focus. The 100-DMA has been acting as key support since late-March and should cap the potential decline once again if the selling pressure reemerges in the days to come.
EURJPY has been on the defensive for the third day in a row on Wednesday. The technical picture has deteriorated after the recent break below the 20-DMA in a corrective phase after failed attempts to challenge the 125.00 resistance late last week. Now, as the downside pressure has intensified, the market focus shifts back to the 100-DMA around 123.30. If the euro manages to stay above this moving average, a bounce should be expected. In the short term, as a bearish slope in the daily RSI shows, EURJPY will likely remain on the defensive. As of writing, the pair was changing hands around 123.70, slightly off intraday lows.