A deeper correction could take place before the bulls reenter the game and send the euro to fresh long-term tops
EURUSD turned marginally higher on Thursday following four days of a bearish correction from April 2018 highs registered around 1.2180 late last week. The pair was clinging to the 1.2100 figure during the European hours, struggling to see a more robust local ascent. Despite the lack of bullish momentum, the common currency remains within a strong bullish trend. At this stage, a deeper correction could take place before the bulls reenter the game and send the prices to fresh long-term tops. In this scenario, the euro could retreat towards the ascending 20-DMA around 1.1970, or even to the 1.1900 figure where buyers should reemerge.
GBPUSD switched into a corrective mode today, having dipped below the 20-DMA in recent trading. The pair dipped marginally below the 1.3300 figure, extending the retreat following yesterday’s rejection from the 1.3480 area. In the short term, the cable needs to regain the mentioned moving average (today at 1.3330) in order to resume bullish attempts. On the four-hour charts, the technical picture has deteriorated further after the pound failed to reclaim the 20- and 100-SMAs as support levels. Furthermore, the RSI is pointing south in the neutral territory, suggesting there is room for further downside in the short term.
USDJPY has accelerated the recovery on Thursday, having reclaimed the 20-DMA as support. The pair climbed to one-week highs around 104.60 but has retreated marginally since then. Also, the greenback is yet to confirm the latest breakout on a daily closing basis. If the upside pressure intensifies in the near term, the prices could face local resistance in the 105.00 zone and lose the bullish momentum as the greenback still looks fragile and vulnerable to fresh losses. However, as the RSI both in the short-term and daily charts is pointing higher, USDJPY will likely retain the current bullish bias today. In a wider picture, the pair remains within a broader downtrend, however.
The upside momentum surrounding the Kiwi has eased since reaching peaks around 0.7100 last week. Since then, the pair stays afloat but struggles to show a robust bullish extension while the daily RSI has settled around the 70 figure, having corrected marginally from the overbought territory. Today, NZDUSD is trading 0.3% higher while staying above the 0.7000 psychological support. Also, the ascending 20-DMA (today at 0.6986) has been acting as the key support for over a month already. As long as the prices stay above this moving average, downside risks look limited. On the upside, the New Zealand dollar needs to overcome the 0.7060 intermediate resistance in order to retarget April 2018 highs seen last week.
USDCHF is little changed on Thursday after marginal gains seen yesterday. The downside pressure surrounding the dollar persists after a break below the descending 20-DMA, today at 0.9025. As long as the pair stays below this moving average, bearish risks persist in the short- and medium-term. At the start of the week, the pair peaked at 0.8945 and has been under pressure since then while recovery attempts attract fresh buyers, suggesting the least path of resistance for the greenback is still to the downside despite the daily RSI if flirting with the 70 figure and is about to enter the oversold conditions. The immediate support now arrives at 0.8870 where early-2015 lows seen yesterday arrive.