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Home » Greenback keeps losing its value

Greenback keeps losing its value

by Joseph Deen
January 6, 2021 08:29
in Technical analysis
0
Pound corrects higher due to dollar weakness

The common currency is nearing the overbought conditions, suggesting s short-term pullback could occur before another bull run takes place

EURUSD

EURUSD refreshed long-term highs around 1.2350 on Wednesday, and it looks like the pair is ready to challenge the 1.2400 barrier next as the USD index remains under heavy selling pressure amid the persisting risk-on mood across the financial markets. The common currency is nearing the overbought conditions, suggesting s short-term pullback could occur before another bull run takes place and pushes the prices to fresh tops. On the hourly timeframes, the pair is well off the 20-SMA, which implies that the euro will likely keep positive momentum in the immediate term. in case of a downside correction, the nearest support should be expected at 1.2325, followed by 1.2300.

GBPUSD

GBPUSD has been staying above the 20-DMA since December 23, having settled just below May-2018 highs registered at 1.3700 at the start of the week. the cable retains a bullish bias following a short-lived rejection from fresh tops but still refrains from a decisive break above the mentioned psychological barrier that represents the key target for sterling bulls at this stage. If the pound manages to overcome this hurdle, the next resistance should be expected at 1.3770. In the four-hour timeframes, the prices are flirting with the 20-SMA, pointing to a slowdown in the upside momentum. As such, the pair could see some consolidation with a bearish bias before another rally takes place and sends the sterling above 1.3700.

USDJPY

USDJPY extended losses to 102.60 before staging a local reversal in recent trading on Wednesday. The pair climbed to 102.90 and turned marginally positive on the day. Still, downside risks continue to persist for the greenback as the pair doesn’t dare to regain even the 103.00 barrier that represents the immediate upside target at this stage. If the selling pressure reemerges, the pair could target the 102.00 handle once the 102.60 level turns into resistance. On the upside, USDJPY needs to firmly recover above the descending 20-DMA (today at 103.50) so that to see a more modest downside pressure in the short-term charts.

NZDUSD

The Kiwi derives support from the ascending 20-DMA in late-December and has accelerated the ascent since then. The pair rallied above the 0.7300 figure for the first time since April 2018 before retreating slightly from fresh long-term peaks. On the other hand, the New Zealand dollar could see a downside correction in the short term, as the daily RSI has exceeded the 70 figure, pointing to overbought conditions. On the hourly charts, the pair needs to hold above the 20-SMA (today at 0.7265) in order to avoid a deeper retreat in the short term. On the upside, a decisive break above 0.7300 would pave the way toward the 0.7355 next resistance.

USDCAD

USDCAD has accelerated the decline following a break below the 20-DMA earlier this week. As a result, the pair dipped to fresh April-2018 lows around 1.2630 on Wednesday. The pair has trimmed intraday losses since then but failed to reenter positive territory on the daily charts. Despite another sell-off in the greenback, the daily RSI hasn’t entered the oversold conditions yet, suggesting the pair could suffer further losses in the short term. On the four-hour charts, the pair is now below the three key moving averages, which implies that the dollar could extend the decline and threaten the 1.2600 level that represents the immediate support. On the upside, the technical picture would improve somewhat if the prices regain the mentioned 20-DMA, today at 1.2775.

Tags: EURUSDGBPUSDNZDUSDUSDCADUSDJPY
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Joseph Deen

Joseph Deen

Joseph is a technical analysis expert. A graduate of NYU, Joseph has a master's degree in mathematics. On FWNews, Joseph provides exchange rates reviews and forecasts.

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