As long as the euro stays below 20-DMA, downside risks continue to persist
EURUSD dipped to fresh two-month lows around 1.1950 earlier in the day. The pair staged a bounce from the 100-DMA early in Europe, to turn positive on the day. Despite a local recovery, the common currency stays below the 1.2000 key handle and was last seen trading around 1.1975, just 0.13% higher on the day. On the upside, significant resistance is represented by the descending 20-DMA that arrives just above the 1.2100 figure today. As long as the prices stay below this moving average, downside risks continue to persist. On the positive the daily RSI has turned marginally higher, suggesting downside risks could abate in the short term.
GBPUSD briefly dipped to 2.5-week lows around 1.3565 on Thursday before rebounding. The pair is trading in the green today but struggles to see a more robust bullish bias while staying not far from long-term lows registered above 1.3750 last week. It looks like the cable will continue its consolidation in a tight range before another bull run takes place as the downside potential remains limited as long as the pair oscillates around the 20-DMA, today at 1.3660. On the downside, the intermediate support arrives at 1.3600, followed by the mentioned low. In the immediate term, the prices need to regain the 1.3700 figure in order to see fresh highs in the coming days.
USDJPY rose to a three-month high of 105.63 earlier in the day. However, the pair failed to confirm a break above the 200-DMA and retreated as dollar demand started to wane across the board ahead of the weekend. As a result, the prices have corrected lower to the 105.30 area before bouncing back in the green. As of writing, USDJPY was changing hands just below 105.60, up 0.04% on the day. The fact that the dollar refrained from a deeper retreat and managed to regain bullish bias suggests the downside potential is limited at this stage while bullish momentum persists. If the greenback receives another boost by the end of the day. The mentioned moving average could turn into support on a daily and weekly closing basis.
Gold prices turned into a recovery mode following yesterday’s plunge that took prices to early-December lows around $1,785. The precious metal rebounded above $1,800 while the $1,810 region caps further bullish attempts during the European trading. If the downside pressure surrounding the dollar intensifies in the coming days, the bullion could retarget the 20-daily moving average that arrives at $1,843 today. On the four-hour charts, the technical picture has improved somewhat but the XAUUSD pair is yet to regain the descending 20-SMA that arrives at $1,822. In a wider picture, the 100-DMA (today at $1,873) represents the key hurdle for gold bulls.
NZDUSD struggles to regain upside momentum following yesterday’s plunge below the 20-DMA that now acts as the immediate resistance that capped bullish attempts earlier in the day on Friday. The pair turned flat in recent trading, struggling for direction as the prices are now stuck between the 20- and 100-SMAs on the hourly charts. On the downside, the immediate support arrives at 0.7135, followed by the 0.7100 figure last seen more than one week ago. However, the daily RSI has turned flat in the neutral territory, suggesting the downside potential is limited at this stage. On the other hand, the 20-DMA will likely cap recovery attempts in the near term.