The common currency stays on the defensive since is rejection from the descending 20-DMA last week
EURUSD slumped to two-month lows on Tuesday as the dollar stays elevated across the board despite positive risk sentiment in the global financial markets. As such, the pair dipped to the 1.2030 area during the European hours and could threaten the 1.2000 figure if the pressure persists in the short term. The euro stays on the defensive since its rejection from the descending 20-DMA last week, with downside risks persisting as long as the common currency remains below this moving average, today at 1.2147. On the four-hour charts, the prices have settled below the key moving averages while the RSI is nearing the oversold territory, suggesting a bounce from the current lows could be expected in the immediate term.
GBPUSD turned marginally higher following two days of losses. The pair continues to derive support from the 20-DMA, today around 1.3650. The cable has settled in a tight trading range, struggling for direction following recent ascent to fresh long-term highs just below the 1.3760 region. In a wider picture, the pound stays bullish, being just slightly off the mentioned highs while refraining from a deeper correction despite dollar strength. If the pair manages to hold above the 20-DMA in the short term, another bull run towards fresh tops could be expected. In the hourly timeframes, the RSI turned directionless in the neutral territory, suggesting downside risks remain limited.
USDJPY retains a bullish tone on Tuesday, flirting with the 105.00 figure for the second day in a row for the first time since mid-November. If the pair manages to make a decisive break above this hurdle, the technical picture would improve further. However, it looks like the dollar will struggle to overcome this barrier in the short term, especially as the daily RSI has turned flat while nearing the overbought territory. In case of a rejection, USDJPY will first target the 104.70 support area, followed by 104.40 where the 100-DMA lies. In a wider picture, the pair needs to hold above the ascending 20-DMA that now arrives marginally below the 104.00 figure.
The cross has been under selling pressure since Monday, slipping back to the 20-DMA in recent trading. The pair could see deeper losses in the short term if this moving average (today at 126.30) gives up. In this scenario, the common currency would target the 126.00 figure next. In the short term, the pair will likely stay on the defensive as the daily RSI is pointing south in the neutral territory while the mentioned MA looks fragile. On the upside, EURJPY needs to regain the 127.00 figure in order to retain a bullish tone and challenge fresh two-year highs above the 127.50 region.
USDCHF keeps climbing on Tuesday, staying elevated since a bounce from the key 20-DMA that had been acting as strong support during the past week. In recent trading, the greenback rose to fresh two-month highs around 0.8980, now threatening the 0.9000 psychological level and the 100-DMA (today at 0.9017) last seen in late-May 2020. As this moving average represents a strong resistance level, the pair could need an extra impetus to challenge this zone in the days to come. If the upside momentum starts to recede any time soon, the immediate support should be expected at 0.8945, followed by 0.8920, and the 0.8900 handle.