A decisive break above 1.2300 looks unlikely at this stage as trading conditions are too thin ahead of the New Year’s holidays
EURUSD rallied to fresh April 2018 highs just below the 1.2300 figure on Wednesday as the greenback keeps losing ground nearly across the board amid positive risk sentiment in the global financial markets. The pair bumped into resistance and retreated to the 1.2260 area, staying marginally positive on the day. Despite the recent rally, the daily RSI hasn’t entered the overbought territory yet, suggesting the euro could make another bull run to challenge the 1.2300 barrier. However, a decisive break above this level looks unlikely at this stage as trading conditions are too thin ahead of the New Year’s holidays. On the four-hour charts, the RSI has reversed south, which implies that the pair could struggle to retain a bullish intraday bias in the short term.
GBPUSD bounced from the 20-DMA yesterday, extending gains on Wednesday. The pair climbed to this week’s highs in the 1.3575 area that represent a barrier on the way to the 1.3600 handle. the cable stays above the ascending 20-DMA while the daily RSI is pointing marginally higher in the neutral territory, suggesting the prices could challenge the mentioned hurdle in the short term if the selling pressure surrounding the greenback persists. On the downside, the 1.3490 figure remains in market focus, with bearish risks looking limited at this stage.
USDJPY started the week on a stronger footing but failed to preserve the initial gains and retreated as a result. The pair was once again rejected by the significant 20-DMA (today at 103.75), having extended losses to the 103.20 area on Wednesday. Now, as the dollar is threatening the 103.00 figure, the March lows around 102.85 are coming back into market focus. However, it looks like the greenback will refrain from a dip below the 103.00 level that could trigger a local bounce in the short term. Otherwise, the pair could target fresh multi-month lows before the end of the year.
XAUUSD keeps marginally positive for the second day in a row on Wednesday, struggling to see a more robust upside bias as traders are being deterred by the important 100-DMA and the $1,900 psychological handle that represents the key short-term resistance. On the downside, the precious metal stays above this week’s lows registered at $1,869 on Monday. As of writing, the pair was changing hands marginally below the $1,880 figure, just marginally higher on the day. As the prices are now stuck between the 20- and 100-DMAs, the current dynamics looks neutral.
USDCAD keeps losing ground for the fifth day in a row on Wednesday, flirting with the descending 20-DMA, today at 1.2800. A decisive break below this moving average that represents the key immediate support would mark further deterioration in the short- and medium-term technical picture. The key support arrives at 1.2780. Once below this level, the pair could slip back to April 2018 lows last seen in mid-December. On the upside, the immediate target for USD bulls arrives at 1.2830, followed by the 1.2850 region. However, as the path of least resistance is still to the downside, the mentioned support levels remain in market focus for the time being.