The 20-DMA could act as support for the euro and even trigger a bounce should risk sentiment improve in the short term
EURUSD slipped to the 1.2115 area during the European hours and was clinging to the lower end of the extended intraday range at the time of writing, suggesting the common currency could stay on the defensive in the short term. The safe-haven demand persists since yesterday when a sudden spike in the 10-year US Treasury yields triggered a massive sell-off across the risky assets. If the mentioned lows fail to withstand the bearish pressure, the common currency could get back below the 1.2100 level. However, the 20-DMA that arrives just under this figure could act as support and even trigger a bounce should risk sentiment improve in the short term. On the upside, the immediate resistance now arrives at 1.2150.
GBPUSD has been retreating from long-term highs registered above 1.4300 earlier this week. The pair slipped to the 1.3900 figure, now threatening the slightly ascending 20-DMA, today at 1.3865. As long as the cable stays above this moving average, short-term downside risks look limited. During the recent sell-off, the daily RSI has corrected from the overbought territory and was pointing lower at the time of writing, suggesting the pair could stay under pressure later in the day. On the four-hour charts, the pound is flirting with the 100-SMA, a break below which would be a sign of further deterioration in the near-term technical picture.
USDJPY has been rallying for the fourth day in a row on Friday, climbing to late-August highs in the 106.50 area. Now, as the pair has settled solidly above the key moving averages, the technical picture has improved substantially on the daily timeframes. However, as the daily RSI is nearing the overbought territory, the mentioned top could cap further gains in the pair. In this scenario, the dollar would initially retreat to the 106.20 area, followed by 106.00. If this level gives up, the 200-DMA (today at 105.50) will come back into market focus. Should the greenback extend the ascent, the 106.70 intermediate resistance would become the next upside target for dollar bulls.
XAUUSD has been trending lower this week, following failed attempts to challenge the descending 20-DMA that has been acting as the key obstacle for bulls for two weeks already. As such, the precious metal refreshed mid-2020 lows around $1,755 earlier in the day before bouncing. Still, the bullion remains negative on the daily charts as dollar demand persists, capping recovery attempts in the gold market. As of writing, the metal was changing hands around $1,765, off intraday highs registered at $1,775 earlier in the day. On the hourly timeframes, the prices continue to follow the descending 20-SMA, adding to the downbeat technical picture in the short term.
USDCAD bounced strongly from fresh three-year lows registered in the 1.2467 area on Thursday. The pair extended the rebound to 1.2650 earlier today before retreating slightly. Despite the persisting bullish bias, the dollar will hardly be able to challenge the 20-DMA any time soon. A break above this moving average (today at 1.2690) would pave the way towards the 1.2700 barrier last seen one week ago. On the downside, the immediate support now arrives in the 1.2590-1.2585 zone. The pair needs to preserve gains above this region in order to avoid another sell-off amid profit-taking following the recent rally.