The common currency is yet to confirm a break above the 1.17 handle on a daily basis
Despite the political uncertainty ahead of the US presidential elections, risk-on sentiment dominates global markets on Tuesday, putting the dollar under widespread pressure. As a result, EURUSD managed to recover above the 100-DMA and climbed to four-day highs in the 1.1720. However, the common currency is yet to confirm a break above the 1.17 handle on a daily basis. If the pair extends the rebound, the next hurdle for bulls should be expected at 1.1760 where the 20-DMA lies. As long as the prices stay below this moving average, downside risks persist despite the current strength. On the four-hour charts, EURUSD has exceeded the descending 20-SMA which is a bullish sign in the short term.
GBPUSD bounced from one-month lows registered below the 100-DMA at the start of the week and was flirting with the 20-DMA as of writing. If the cable overcomes this hurdle that arrives at the 1.30 psychological level, the near-term technical outlook could improve marginally. In this scenario, the next resistance is expected at 1.3060. On the downside, the mentioned 100-DMA acts as the key support. A decisive break below this moving average (today at 1.2880) could send the pound to late-September lows below 1.27. In a wider picture, GBPUSD remains in a neutral pattern as long as the prices stay above the 100-SMA on the weekly timeframes.
USDJPY has turned marginally positive on the day after a brief dip below the 104.50 area earlier in the day. Still, the dollar refrains from challenging the 105.00 handle since a strong rejection from the 20-DMA that continues to act as the key resistance for the greenback. As such, the current bullish attempts look too fragile and unstained to bet on more robust gains in the near term. Furthermore, the daily RSI looks directionless in the neutral territory while in the four-hour timeframes, the prices remain stuck between the 100- and 20-SMAs. Of note, the 105.00 handle coincides with the 100-SMA, confirming the strength of this barrier.
The Aussie bounced strongly from the July lows registered just below the 0.70 handle on Monday. Today, the pair jumped to the 0.7130 area, having recovered above the 20- and 100-DMAs. As a result, the daily RSI has reversed north and was last at 51.50, suggesting further gains could lie ahead. For a bullish extension, AUDUSD needs to see a daily close above the 1.71 handle. If so, the next barrier for AUD bulls is expected at 1.7160. On the four-hour charts, the pair is flirting with the 200-SMA, a break above which could pave the way to this significant hurdle that will likely act as a strong resistance zone and trigger a downside correction.
USDCAD extends the retreat from the 1.34 barrier seen last week. The pair failed to hold above the 100-DMA on Monday and has accelerated the decline today. As a result, the 20-DMA turned into resistance while the prices edged lower to one-week lows in the 1.3135 area. If this intermediate support gives up, the 1.31 handle will come back into the market focus for the first time in nearly two weeks. Meanwhile, the daily RSI reversed lower but has slowed the downside momentum in recent trading, suggesting the bearish impetus could be exhausted soon.