EURUSD extended yesterday’s ascent to the 20-DMA that has been acting as resistance for two weeks already
EURUSD turned positive on the day despite the prevailing risk aversion that furls the safe-haven dollar demand. The pair extended yesterday’s ascent to the 20-DMA that has been acting as resistance for two weeks already. However, it looks like the pair will lack the upside impetus to overcome this barrier as the greenback is trending higher at the end of the week. If the common currency is rejected from the key moving average that arrives just below the 1.2200 handle, the prices could easily pull back under the 1.2150 zone. On the four-hour timeframes, the pair is now stuck between the 20- and 200-SMAs, suggesting the prices could spend some time in a consolidation mode before deciding on a further direction.
GBPUSD rallied to fresh long-term highs around 1.3745 on Thursday and has been correcting lower since then as traders proceeded to profit-taking at attractive levels. The cable was last seen at 1.3660, down 0.53% on the day. If the 1.3650 area withstands the selling pressure, a bounce above 1.3700 could be expected, with the pair staying within a strong uptrend. However, if the dollar recovery accelerates any time soon, the pound could revisit the 20-DMA (today at 1.3620) for the first time since Monday. Anyway, it looks like downside potential is limited at this stage.
USDJPY bounced from the 103.30 region yesterday, having turned positive on Friday. During the recovery, the pair managed to regain the 20-DMA that arrives at 103.57. The greenback extended intraday gains to the 103.70 area that represents the key barrier on the way toward the 104.00 figure. The daily RSI is now pointing slightly higher in the neutral territory, suggesting the pair could at least retain a bullish bias in the short term. However, USDJPY will hardly be able to overcome the 104.00 figure any time soon while bearish risks continue to persist. On the hourly charts, the pair was flirting with the 100-SMA at the time of writing. A successful break above this level would trigger further improvement in the near-term technical picture.
The cross found a bottom just above the 125.00 figure on Monday and has been trending mostly higher since then. Today, the pair has exceeded the 126.00 handle and rose to the 20-DMA for the first time in a week. The euro could overcome this barrier if risk sentiment improves in the short term. Otherwise, a retreat back to 126.00 or below should be expected. In a wider picture, EURJPY stays elevated while holding above the 20-weekly moving average since late-November. As long as the prices hold above this MA that arrives around 124.70, downside risks look limited.
The Aussie turned lower on Friday following three days of gains in a row. The pair rose to weekly highs around 0.7780 yesterday and has been retreating since then, now threatening the key 20-DMA that has been acting as support since early November. So, a break below this moving average (today at 0.7709) could trigger a deeper pullback within the current local correction. The daily RSI has reversed south in the neutral territory, suggesting downside risks could persist in the short term. On the four-hour timeframes, the pair is now under the key moving averages, adding to the downbeat technical picture. If the mentioned moving average gives up, the 0.7650 area will come back into market focus.