Despite the lack of buying pressure at this stage, downside risks surrounding the euro look limited as well
EURUSD bumped into resistance at fresh long-term tops marginally below 1.2180 late last week. as a result, a pattern similar to a double top was created on the daily charts, suggesting the euro could struggle to overcome this barrier on the way towards 1.2200. Following a rejection from highs, the pair has been in a corrective mode, extending the retreat on Monday. The prices dipped to intraday lows in the 1.2080 area earlier in the day but managed to trim losses and has settled marginally above the 1.2100 figure since then. Despite the lack of buying pressure at this stage, downside risks look limited as well. In the short term, the common currency needs to hold above the 1.2100 figure in order to avoid a deeper correction.
GBPUSD
GBPUSD peaked at 1.3540 on Friday but was strongly rejected from fresh highs and finished unchanged. The cable extended the decline to start the week, having slipped to the 1.3225 area earlier in the European session. The pair has trimmed losses partially since then but still stayed below the 20-DMA, today at 1.3300. As a result, the hourly RSI slipped into the oversold territory, struggling to reenter the neutral zone. The immediate resistance is now represented by the mentioned moving average, followed by the 1.3365 area and the 1.3400 figure. On the downside, a break below 1.3220 could pave the way towards the 1.3200 figure.
USDJPY extended the recovery from local lows, having settled marginally above 104.00 on Monday. However, the dollar has once again encountered resistance in the form of the 20-DMA, today at 104.35. As long as the pair stays below this local barrier, downside risks will likely continue to persist. Once above it, the greenback could challenge the 104.65 area, followed by the 105.00 figure. On the four-hour timeframes, USDJPY was flirting with the 100-SMA at the time of writing while showing some signs of a downside correction. Of note, the RSI in the same timeframes has reversed slightly lower in recent trading, suggesting the upside potential could stay limited in the short term.
XAUUSD
XAUUSD bumped into resistance in the form of the 20-DMA late last week, struggling to regain the bullish bias since then. The bullion retreated to the $1,822 area earlier in the day and has recovered partially since then. Still, the precious metal remains on the defensive on the daily charts, suggesting the downside pressure could intensify if the mentioned moving average doesn’t give up any time soon. On the downside, significant support is represented by the 200-DMA that lies marginally above the $1,800 handle. The yellow metal needs to hold above this figure in order to avoid a deeper correction towards the recent lows around $1,765.
AUDUSD
The Aussie has reversed from more-than two-year highs last week and has been correcting lower since then. The pair slipped to 0.7370 earlier during the European hours and has trimmed intraday losses since then. In the short term, the prices need to regain the 0.7400 handle in order to reverse local losses. In a wider picture, the pair remains within a broader bullish trend that stays intact as long as the Australian currency holds above the 100-DMA, today at 0.7210. On the four-hour charts, the pair has got below the 20-DMA, adding to a short-term bearish picture as well as the bearish slope in the daily RSI.
