After a negative knee-jerk reaction, demand for the safe-haven greenback reemerges
EURUSD failed to extend yesterday’s rally witnessed due to dovish rhetoric from the Federal Reserve. The pair’s ascent was stopped ahead of the 1.2000 figure, sending the common currency back into negative territory on the daily charts. As of writing, the euro was clinging to intraday lows around 1.935, down 0.34% on the day. Earlier, EURUSD lacked upside momentum to challenge the 20-DMA that arrives marginally above 1.2000, suggesting the recovery potential remains limited while bearish risks continue to persist, making the pair vulnerable to further losses in the short term. On the four-hour timeframes, the euro at a crossroads as the pair is now stuck between the 20- and 100-SMAs.
GBPUSD remains within a tight trading range these days. Earlier in the day, the pair briefly peaked at the 1.4000 figure for the first time since late last week but was rejected quickly. Since then, the cable has settled around the flat-line, struggling for short-term direction at the 20-DMA that arrives in the 1.3960 area. Despite the lack of bullish impetus at the current levels, the pair remains relatively resilient despite dollar strength, suggesting the pound could receive a fresh bullish boost following the current hesitation. If so, a decisive break above the 1.4000 psychological level would pave the way towards long-term tops above 1.4200 last seen in February. On the downside, the immediate support is represented by intraday lows around 1.3935.
USDJPY continues to cling to mid-2020 highs despite the recent bearish attempts that failed at 108.60 earlier in the day. As a result of the subsequent bounce, the greenback rallied back to the 1009.30 area, a break above which is now crucial for a bullish extension in the short term. If this resistance withstands the upside pressure, another local retreat could be expected. However, the potential correction will likely be limited and could attract buyers again. On the hourly charts, the technical picture looks mixed, but downside risks remain limited as long as the prices stay above the 200-SMA, today at 108.85. At the time of writing, USDJPY was changing hands just at the 100-hour SMA.
Gold prices rose sharply late on Wednesday due to the post-FOMC US dollar selling – the yellow metal briefly jumped above $1,750 in a knee-jerk reaction to the outcome of the meeting. However, the prices failed to preserve gains and were rejected from early-March highs in the $1,755 area. Furthermore, the bullion got back below the 20-DMA in recent trading, to extend losses to $1,732. Failure to hold above this week’s lows around $1,720 will reaffirm the bearish outlook for the commodity in the short term at least. On the four-hour timeframes, XAUUSD was last on the verge of losing the key moving averages including the 100-SMA that arrives at $1.731.
The Aussie trimmed early gains as dollar demand started to reemerge during the European hours. The pair briefly slipped from March highs around 0.7850 but still remains in positive territory at the time of writing. The prices derived support from the 20-DMA that arrives marginally below the 0.7800 handle today. Now, the Australian dollar needs to stay above this figure in order to avoid a deeper retreat towards this week’s lows around 0.7700. On the upside, the pair will hardly be able to make a decisive break above the mentioned highs as the greenback remains steady despite a dovish message from the Fed.