The drugmaker Pfizer added to the upbeat tone among investors
The drugmaker Pfizer said that an early look at data from its coronavirus vaccine shows it is more than 90% effective. Against this backdrop, high-yielding currencies rose while their safe-haven counterparts came under selling pressure. As a result, EURUSD bounced from intraday lows and edged higher to two-month tops above the 1.19 handle. Despite the bounce, the pair was flat as of writing, suggesting the euro could struggle to extend gains further in the short term. On the other hand, the daily RSI is yet to enter the overbought territory, suggesting the common currency could resume the ascent after short-term consolidation. In a wider picture, the key target for bulls arrives at the 1.20 figure last seen in early-September.
GBPUSD
GBPUSD is trading little changed on Monday, struggling for direction despite demand for risky assets picked up recently. The pair climbed to fresh two-month highs just below the 1.32 handle. Despite a modest bullish in the intraday charts, it looks like the pair will need the additional catalyst to challenge this barrier in the short term. Furthermore, this figure could trigger a bearish correction after the current consolidation. If so, the immediate support is expected at 1.3140, followed by 1.3100. On the four-hour timeframes, the cable stays above the key moving averages, which is sterling-positive in the short term.
USDJPY rallied strongly from the March lows registered marginally above the 103.00 handle. Ahead of the opening bell on Wall Street, the pair was flirting with the 105.00 figure while staying above the 20-DMA. Still, the dollar is yet to confirm the latest breakout on a daily closing basis as traders could take some profit after a local rally. In a wider picture, the pair remains bearish as long as the prices stay below the descending 100-DMA, today at 105.87. On the downside, the mentioned moving average now acts as the immediate support. On the hourly charts, the RSI is flat in the overbought territory, suggesting further gains could be limited.
XAUUSD
Gold prices climbed amid a weaker dollar earlier in the day but failed to preserve the upside momentum and reversed abruptly after the news from Pfizer. As such, after a rejection from the $1,965 region last seen in mid-September, the precious metal dipped back below the 20- and 100-DMAs. Furthermore, the $1,900 figure has turned back into resistance in recent trading, suggesting the upside potential in the gold market remains unsustainable, with downside risks persisting in the short-to-medium term while the long-term outlook for gold remains upbeat. In the immediate term, the yellow metal needs to regain the $1,900 level in order to trim intraday losses and reclaim the 20-daily moving average as support.
EURJPY
The cross extended its recovery from the July lows registered around 121.60 in late-October. The pair climbed to October 20 highs just shy of the 125.00 figure in recent trading and retained a strong bullish bias as of writing. The high-yielding euro rallied across the board amid upbeat risk sentiment in the global financial markets after the announcement from Pfizer. Still, the common currency is yet to retain its bullish impetus as the RSI looks overbought in the short term charts, suggesting a bearish correction could take place by the end of the day. On the weekly timeframes, the cross is nearing the 200-SMA that could cap further bullish attempts once again.
