The 1.1800 barrier could cap the upside momentum and trigger a bearish correction in the euro
EURUSD bounced from local lows around the 1.1700 handle amid widespread weakness in the greenback on Monday. The pair jumped to the 1.1790 area, targeting the 1.1800 barrier that could cap the upside momentum and trigger a bearish correction as the recovery in the common currency still looks fragile despite the latest jump. On the four-hour timeframes, the technical picture has improved once the prices have exceeded the key moving averages. Still, the pair could be rejected from the current levels and trim intraday gains in the short term. In this scenario, the common currency may derive local support from the 20-DMA, at 1.1730 today. As of writing, EURUSD was changing hands at 1.1786, up 0.59% on the day.
GBPUSD jumped from the 20-DMA and briefly exceeded the 1.30 psychological handle in recent trading. The pair climbed to 1.3017 and has retreated marginally since then. The daily RSI is pointing slightly higher, suggesting the cable could lack the upside momentum to confirm a break above 1.30 on a daily closing basis. Furthermore, the hourly RSI is entering the overbought territory, which implies that a short term correction could be expected in the short term. On the positive side, GBPUSD keeps holding above the mentioned moving average. If the pair manages to preserve the bullish impetus, the market focus could be shifted to the 1.3080 local resistance.
USDJPY struggles to regain upside momentum after a rejection from intraday highs around 105.50 where the 20-DMA lies. As a result, the pair turned slightly negative on the day while holding above the 105.30 area during the European hours. The daily RSI is directionless in the neutral territory, suggesting some consolidation could continue in the near term. On the downside, the key support arrives at 105.00. As long as the dollar holds above this level, downside risks are limited. If the pair resumes bullish attempts in the short term, the next resistance should be expected at 105.70. However, it looks like USDJPY may need the additional catalyst to make a decisive break above the 105.50 region.
The cross has accelerated its recovery from the 123.00 handle that capped the downside pressure last week. The pair saw a strong bounce from local lows and has exceeded the 124.00 figure during the European hours and was clinging to this level as of writing. Now, the euro needs to confirm the bullish breakout on a daily closing basis. Now, as the pair has staged a local reversal, the 20-DMA at 123.75 acts as the immediate support while on the upside, the next upside target arrives at 124.35. The daily RSI is pointing north in the neutral territory, suggesting there is still room to the upside, at least in the short term. On the four-hour timeframes, the pair needs to overcome the 200-SMA to continue the ascent.
USDCHF had been capped by the 20-DMA for over a week. After several failed bullish attempts, the pair was once again rejected from the levels just below the moving average and retreated under the 0.91 handle in recent trading on Monday. As of writing, the dollar was clinging to this handle that could act as support and even trigger a local recovery. In this scenario, USDCHF will first target the 0.9130 area. If the selling pressure persists in the short term, the prices could extend losses to the 0.9080 region that capped the downside movement last week.