It looks like the common currency could stage a local downside correction before the bulls reenter the game
EURUSD continues to grind higher while refraining from rising to fresh long-term tops, with the 1.2180 area continues to act as the immediate resistance standing on the way towards 1.2200. As of writing, the pair was changing hands around 1.2160, up 0.14% on the day. Meanwhile, the daily RSI continues to flirt with the 70 level, a break above which would be a signal of overbought conditions. It looks like the common currency could stage a local downside correction before the bulls reenter the game and send the prices to fresh highs. In this scenario, EURUSD would first target the 1.2130 area, followed by the 1.2100 figure. On the hourly charts, the euro has settled above the 20-SMA in recent trading, suggesting the short-term technical picture will likely remain constructive.
GBPUSD bounced from intraday lows around 1.3280 registered earlier in the day and reentered the positive territory following three days of losses. The pair climbed to 1.3390, targeting the 1.3400 barrier and having settled above the 20-DMA. If the upside pressure intensifies any time soon, the cable could overcome the mentioned hurdle and extend gains to the 1.3450 resistance that capped bullish attempts on Monday. On the four-hour timeframes, the pound is now back above the key moving averages, which implies that the pair could retain the current upside bias in the short term. Also on the positive side, the RSI is pointing north both in the short-term and daily charts, suggesting bullish risks continue to persist.
USDJPY briefly dipped to 103.50 on Monday but managed to recover quickly. As a result, a long lower wick was created on the daily charts, which implies that bearish risks could be limited from here. However, today, the dollar was rejected from the 20-DMA and got back below the 104.00 figure as a result. At the same time, the daily RSI is nearly unbiased in the neutral territory, suggesting the prices will likely refrain from revisiting yesterday’s lows so far. On the weekly timeframes, USDJPY has been capped by the descending 20-SMA since June while staying within a broader bearish trend as long as the prices remain below the 100-weekly moving average that arrives marginally below the 108.00 figure.
XAUUSD bounced from two-week lows around $1,820 yesterday and regained the upside bias on Tuesday amid a weaker dollar. As a result, the bullion managed to recover to the $1,848 region, having reclaimed the descending 20-DMA as support. A daily close above this moving average (today at $1,834) would be a confirmation of a local breakout. In a wider picture, however, the precious metal remains on the defensive while staying below the 20-weekly MA since October. If the upside pressure persists in the short term, a decisive break above the $1,850 region would mark some improvement in the technical picture.
The Kiwi has been under a mils downside pressure since last Friday but still managed to register fresh April 2018 highs around 0.7120 on Monday. On the positive side, the pair continues to derive strong support from the ascending 20-DMA since early-November while holding above the 0.7060 area on Tuesday. If this level gives up any time soon, the prices could challenge the mentioned moving average. However, as the dollar stays weak nearly across the board, with a risk-on tone dominated the global financial markets, downside risks look limited at this stage. At the same time, NZDUSD needs to stage a daily close above the 0.7100 barrier in order to regain the short-term bullish momentum.