Recovery potential for the common currency looks limited
EURUSD saw a bounce from local lows registered around 1.2020 on Wednesday and turned positive on the day as the dollar started to give up recent gains. Still, the recovery potential for the common currency looks limited at this stage as the prices struggle below the 20-DMA as well as the 1.2100 figure. If the pair manages to overcome these barriers any time soon, the technical picture for the euro would improve somehow. On the downside, the 1.2000 figure remains in market focus while the 100-DMA arrives just below this level. As long as EURUSD keeps trading above this moving average, bearish risks remain limited. In the immediate term, the pair needs to overcome the 1.2075 barrier in order to retarget the 1.2100 figure.
GBPUSD is back on the offensive following a short-lived and modest downside correction witnessed yesterday. Cable remains close to its long-term highs refreshed earlier this week, and it looks like the pair is ready to set new tops while staying strong despite the recent dollar rally. As of writing, the pound was changing hands around 1.3925, targeting the 1.3950 barrier that stands on the way towards the 1.4000 handle last seen in April 2018. On the downside, the pair needs to hold above 1.3900 in the short term so that to retain the current bullish tone and make another decisive breakout. Of note, the daily RSI is nearing the 70 critical mark, suggesting the bull run could lose steam soon.
USDJPY peaked at 106.20 on Wednesday before retreating as the dollar failed to preserve gains due to the resurgent corrective trends. The pair slipped below 106.00 and dipped to the 105.70 area in recent trading while holding above the 200-DMA (today at 105.50) during the European hours. If this moving average gives up any time soon, market focus will shift back to the 105.00 support zone as well as the 20-DMA that arrives at 104.85 today. On the upside, USDJPY needs to regain the 106.00 figure in order to climb to fresh three-month highs. At this stage, it looks like the pair will see more losses before USD buyers reemerge.
Yesterday, the cross climbed to fresh late-2018 highs around 128.45 from where the pair was rejected strongly. As a result, the prices slipped to the 127.30 area that acted as support and triggered a bounce on Thursday. Despite a local reversal, EURJPY is well off the mentioned tops, struggling to overcome the 127.60 intermediate resistance. The daily RSI is pointing slightly higher but lacks the impetus, suggesting the upside potential for the common currency is limited at this stage. On the hourly charts, the pair is now stuck between the 100- and 20-SMAs, pointing to some consolidation before deciding on the further direction.
On Wednesday, USDCAD failed to overcome local resistance represented by the 20-DMA that arrives at 1.2740 today. As a result, the pair was rejected from peaks and turned negative in recent trading as the greenback is losing steam following the recent rally. The prices dipped below 1.2700, to register intraday lows around 1.2680. If this level gives up, the pair would target the next support located at 1.2630. However, it looks like the dollar will refrain from a deeper retreat for the time being as the daily RSI looks directionless in the neutral territory. On the four-hour timeframes, USDCAD is nearing the 20-DMA that represents the immediate support.