The safe-haven rally sent the USD index to fresh four-month highs
EURUSD slipped to 1.1812 earlier in the day as the safe-haven rally sent the USD index to fresh four-month highs. In recent trading, the euro managed to bounce from lows but failed to regain the 20-hour SMA and has settled around 1.1830, down 0.17% on the day. Adding to the bearish technical picture, the pair is now below the key 200-day SMA for the first time since May 2020. On the four-hour timeframes, the RSI is flirting with the critical 30 figure, suggesting the indicator is about to enter the oversold conditions. Now, the immediate upside target arrives at 1.1850 where the mentioned 200-SMA lies. a daily close below this level would be a confirmation of the latest breakdown, with the 1.1800 staying in market focus.
The cable dipped to early-February lows on Wednesday, continuing to give up positions amid broad-based strength surrounding the greenback. The pair fouls support in the 1.3675 area before bouncing marginally. Still, the prices stayed well below intraday highs seen at 1.3757 earlier in the day. Now, the pound needs to settle above 1.3700 in order to avoid another sell-off that would pave the way towards the ascending 100-DMA, today at 1.3605. The last time the pair touched this moving average was in early-November. It looks like this level could act as support and trigger a decent recovery on the condition that the upside pressure surrounding the dollar eases eventually.
USDJPY managed to hold above the 108.40 area during yesterday’s decline and turned marginally positive on Wednesday. Still, the dollar lacks upside impetus to retarget the 109.00 figure as the safe-haven yen demand caps the bullish potential for the pair. On the other hand, the fact that the prices keep holding above the ascending 20-DMA suggests the greenback could stay afloat and regain a firmer bullish momentum eventually. On the downside, a break below 108.40 would pave the way towards the mentioned moving average, today at 108.18. In this scenario, the short-term technical picture could deteriorate further. However, the path of least resistance remains to the upside for the time being.
The bullion stays relatively steady on Wednesday, holding above last week’s lows seen around $1,720. The XAUUSD pair dipped below $1,724 initially before bouncing marginally and was last seen trading in the $1,733 area. Of note, the yellow metal derived support from the 20-DMA during another bearish attempt. As long as the prices stay above this moving average, downside risks are limited. However, the bullion will likely struggle to see more robust gains in the short-term amid the persisting dollar demand. On the four-hour charts, gold prices were flirting with the 20-SMA at the time of writing.
The Kiwi plunged heavily yesterday, extending losses to four-month lows around 0.6965 earlier on Wednesday. In recent trading, the pair came off lows to turn flat on the day, staying below the 0.7000 handle. Furthermore, the New Zealand dollar is now well below the key daily moving averages while the RSI is yet to enter the oversold territory, suggesting the pair could stay under pressure, or even dip to fresh multi-week lows in the short term. On the upside, the immediate resistance now arrives at 0.7010, followed by the 0.7030 area. On the hourly charts, NZDUSD was last seen flirting with the descending 20-SMA.