The greenback has proceeded to a corrective recovery amid oversold conditions
EURUSD was rejected from fresh April-2018 highs around 1.2350 as the greenback has proceeded to a corrective recovery amid oversold conditions. As such, the common currency slipped to the 1.2250 area, a break below which would pave the way toward the 20-DMA that has been acting as significant support for the last two months. So, a break below this moving average would mark deterioration in the technical picture. Still, the euro will stay within a broader uptrend, with the dollar remaining fundamentally weak. In the immediate term, the pair needs to hold above the 1.2210 region in order to avoid a deeper correction.
GBPUSD has been edging lower for the second day in a row on Thursday. The pair has so far been deriving support from the 1.3540 area, a break below which would pave the way toward the important 20-DMA, today at 1.3487. So, as long as the cable stays above this moving average, downside risks are limited. On the hourly timeframes, the prices are now below the three key moving averages while the RSI looks directionless in the neutral territory, suggesting the pound will likely hesitate for some time before deciding on a further direction. In the immediate term, the path of least resistance is to the downside.
USDJPY extended the recovery from long-term lows around 102.60 on Thursday. The pair has climbed to the 103.70 area, now targeting the 104.00 figure, while the 20-DMA turned into support for the first time in over a month. A daily close above this moving average would pave the way for further recovery in the days to come. On the four-hour charts, the pair is nearing the 200-DMA around 103.80 while the RSI is pointing north in the neutral territory, suggesting further gains could lie ahead. Now, as the greenback has staged a reversal, the immediate support arrives at 103.40, followed by the 103.00 figure.
XAUUSD peaked around $1,960 on Wednesday and has been correcting lower since then as the dollar recovery picked up momentum. The precious metal has retreated to the $1,900 figure that capped the selling pressure yesterday. Marginally below this level, the 100-DMA arrives, representing another short-term support for gold. As long as the prices hold above this moving average (today at $1,894), downside risks look limited. On the upside, the immediate resistance is now represented by the $1,935 area, followed by $1,950. The daily RSI is now directionless in the neutral territory, suggesting the metal will likely spend some time in consolidation mode before deciding on the further direction.
USDCHF strongly bounced from fresh long-term lows registered around 0.8760 on Wednesday. The pair extended the recovery to the 0.8840 area, a break above which would pave the way toward the 20-DMA. A recovery above this moving average (today at 0.8850) would be a significant bullish signal for the short-term technical outlook. Once above this level, the dollar could target the 0.8900 handle. of note, the pair is nearing the 100-SMA that acts as the immediate resistance now. On the downside, the nearest support is expected at 0.8810, followed by 0.8800, 0.8770, and 0.8755. In a wider picture, the pair remains within a downtrend despite the latest bounce.