The common currency could see a pullback before another bull run takes place
EURUSD climbed to the 1.2257 figure for the first time since December 18 on Tuesday, extending the ascent amid a weaker safe-haven dollar. As the pair stays firmly above the ascending 20-DMA while retaining a bullish bias, the euro could extend the ascent to fresh long-term highs above 1.2270. However, the common currency could see a pullback before another bull run takes place. In this scenario, the prices may retreat to the mentioned moving average (today at 1.2160) first. It is also possible that profit-taking will take the pair below this MA, which implies a more aggressive bearish correction. In the short-term, however, the euro will likely retain its bullish bias.
GBPUSD bounced from the 20-DMA that now acts as the key immediate support and turned marginally positive on the day after steep losses seen on Monday. The pair climbed to the 1.3520 area earlier in the day but failed to preserve the upside momentum and trimmed intraday gains in recent trading. Having settled below the 1.3500 level that now represents the nearest target for bulls. A daily close above this figure would be a confirmation of the latest recovery. Otherwise, a more pronounced retreat could be expected. On the four-hour charts, the pound has dipped below the 20-SMA recently, suggesting short-term downside risks may be increasing.
USDJPY made another failed attempt to break above the important 20-DMA that has been acting as resistance since mid-November. As such, following a two-day winning streak, the pair turned marginally lower on Tuesday after another rejection from the mentioned moving average, today at 103.80. In the short term, the dollar needs to make a decisive break above the 104.00 barrier so that the technical picture to improve somehow. On the downside, immediate support is located at 103.60. A break below this level would pave the way towards 103.25, followed by March lows below 103.00.
The cross jumped to fresh March highs above 127.00 on Tuesday amid the lack of demand for the safe-haven Japanese yen. The pair has been rising for the fourth day in a row already, deriving support from the ascending 20-DMA, today at 126.27. As of writing, the euro was changing hands just at the 127.00 handle, a decisive break above which would pave the way towards fresh multi-month highs. However, this barrier could attract some profit-taking in thin pre-holiday trading in the short term. In this scenario, EURJPY may get back below the mentioned 126.60 intermediate support and even threaten the 126.00 mark.
USDCHF extends the pullback from local highs seen above 0.8900 at the start of the week. The pair’s decline has accelerated following a break below the descending 20-DMA, today at 0.8885. The dollar slipped back to the 0.8850 area, with the daily RSI pointing south, which implies that further losses could lie ahead in the short term. Adding to the downbeat technical picture, USDCHF has dipped below the key moving averages in the short-term charts in recent trading. If the selling pressure persists in the immediate term, the greenback could slip back to May 2015 lows seen around 0.8820 earlier this month. In case of a recovery, the immediate resistance is represented by the mentioned moving average.