EURUSD is nearing the 20-SMA, a break below which would pave the way towards 1.1840
EURUSD was rejected from local peaks in the 1.1890 area and erased nearly all intraday gains as the selling pressure surrounding the greenback has eased during the European hours. The pair slipped to 1.1865, struggling to stage a more robust ascent, which implies that the common currency could see a bearish correction in the short-term, especially as the pair has created a pattern similar to a double top around the mentioned highs. The prices need to see a decisive break above the 1.1900 barrier in order to extend gains and retarget the 1.2000 handle. On the four-hour charts, EURUSD is nearing the 20-SMA, a break below which would pave the way towards 1.1840.
GBPUSD extends modest gradual gains for the fourth consecutive day on Wednesday. The pair encountered the 1.33 barrier once again earlier in the day and has retreated slightly since then, suggesting the pound lacks the bullish impetus to overcome the key hurdle on the way towards early-September highs around 1.34. In a wider picture, the cable retains the upside momentum, with bearish risks being limited as long as the prices stay above the ascending 20-DMA, today at 1.31. Meanwhile, the daily RSI is pointing slightly higher but is yet to enter the overbought territory, which implies that there is still room to the upside. If the pound managed to cling to the current levels in the short term, another bullish attempt at 1.33 could be expected.
USDJPY continues to lose ground for the fifth session in a row, having extended the decline below 104.00. The pair dipped to the 103.80 area ahead of the opening bell on Wall Street, with the daily RSI pointing south, suggesting the dollar could stay on the defensive as the safe-haven dollar demand persists despite the renewed optimism surrounding the coronavirus vaccine. In particular, Pfizer said today that it has achieved the safety data milestone required by FDA, and its vaccine efficacy is 95% in the final analysis. In the short term, USDJPY needs to regain the 104.00 figure in order to avoid deeper losses. For now, however, it looks like the path of least resistance is still to the downside, especially as the RSI remains in the neutral territory, showing a bearish slope.
The cross has declined to the key 20-DMA marginally below 123.30 and could see more losses in the short-term if this moving average fails to withstand the current downside pressure. The pair came under more intense pressure after a break below the 100-DMA earlier this week. Now, as the euro is threatening the 123.00 handle for the first time in nearly 1.5-week, it looks like the prices could extend the decline to the 122.50 key support zone that could cap the selling pressure. Otherwise, the July lows in the 121.60 area will come back into market focus. Of note, this zone capped the downside movement in late-October.
The Kiwi climbed to fresh March highs around 0.6930 on Wednesday amid widespread weakness in the greenback. Now, the pair needs to hold above the 0.6900 figure in order to confirm the latest breakout and extend the rally. If so, the next hurdle for bulls should be expected at 0.6940, followed by 0.6970. On the downside, the inability to reclaim the 0.6900 handle as support could pave the way towards the 0.6880 initial support where the 20-SMA on the four-hour charts lies. In a wider picture, the New Zealand dollar has overcome the key weekly moving averages, suggesting further gains could be expected in the medium term.