USDJPY extends Friday’s upside correction at the start of the week amid broad-based demand for the greenback
Risk-off sentiment sent the US dollar higher across the board on Monday, sending the euro to the 1.2130 area that has been capping further losses so far. As such, the common currency extends the correction from fresh long-term highs registered around 1.2270 last week. If the pair fails to hold at the current lows, the 20-DMA (today at 1.2086) could act as the next support. The daily RSI has now corrected from the overbought territory and pointing south, which implies that the euro will at least stay on the defensive in the immediate term. If recovery takes place any time soon, the European currency could target the 1.2180 region first.
In a similar fashion, GBPUSD opened sharply lower on Monday, having derailed the 1.3200 figure following a break below the 20-DMA. So, the cable extended its bearish correction from mid-2018 highs above 1.3600 registered last week. Despite the recent plunge, the pound stays within a broader uptrend and could regain its bullish bias if risk sentiment improves after the current sell-off. If the pressure intensifies, GBPUSD would threaten the 100-DMA around 1.3115. A break below this level would mark deterioration in the short-term technical picture. On the hourly charts, the pair has settled below the key moving averages while the RSI is signaling oversold conditions but continues to point lower, suggesting the selling pressure will likely persist in the short term.
USDJPY extended Friday’s upside correction at the start of the week amid broad-based demand for the greenback. In recent trading, the pair rallied 0.50% on the day, staying just shy of the descending 20-DMA that arrives marginally below the 104.00 figure. This level is the key target for dollar bulls at the moment as failure to turn this moving average into support could push the prices lower again. On the positive side, the daily RSI has bounced from the 30 figure while retaining a strong upside bias, suggesting USDJPY could extend its bullish attempts in the short term. Otherwise, a correction could take place and send the prices back below the 103.50 area.
XAUUSD briefly jumped to November 9 highs marginally above the $1,900 earlier in the day but dialed to preserve the upside momentum and corrected lower in recent trading. The precious metal has settled around $1,870 since then, off intraday lows registered at $1,855. The prices bumped into resistance represented by the 100-DMA that acts as the key obstacle for bulls at this stage, and it looks like the bullion could need the additional impetus to challenge this moving average despite risk aversion. On the positive side, gold prices flirted with the 20-weekly MA for the first time in six weeks, suggesting the recovery momentum could persist for some time yet.
The Kiwi slumped on Monday, having accelerated its bearish correction from fresh April-2018 highs registered last Thursday around 0.7170. The pair slipped to the 0.7000 psychological level, a break below which would pave the way to further losses in the short term. During the sell-off, NZDUSD has derailed the 20-DMA, adding to the negative technical picture. Furthermore, the daily RSI has reversed sharply lower and has exited the overbought territory, suggesting downside risks will persist for the time being. Now, the immediate resistance is represented by the mentioned moving average, today at 0.7055. On the four-hour timeframes, the pair dipped below the key moving averages while the RSI is pointing lower, suggesting the New Zealand dollar will stay on the defensive in the immediate term.