USD will likely regain the ascent following a short-lived and limited upside correction
EURUSD managed to bounce slightly from fresh November lows around 1.1700 on Wednesday and has been trending higher since then. However, the recovery momentum looks too modest to bet on substantial gains in the short term, with the euro staying below the 1.1760 area during the European hours on Thursday. The fact that the common currency struggles to extend the recent bounce suggests that downside risks remain in place, and the dollar will likely regain the ascent following a short-lived and limited upside correction. As such, the risk of a break below the 1.1700 figure persists.
GBPUSD is flat on Thursday, still struggling for direction below the key 20-DMA, today at 1.3840. Yesterday, the pair failed to hold above the 1.3800 figure that represents the immediate upside hurdle for the time being. If the selling pressure surrounding the dollar intensifies any time soon, a decisive break above 1.3800 would pave the way towards the mentioned moving average. However, the upside potential looks limited at this stage as the dollar stays broadly resilient despite the local retreat from fresh peaks. On the four-hour timeframes, the technical picture looks neutral, as the prices keep flirting with the 20-SMA while the RSI is directionless.
USDJPY climbed to fresh one-year highs just below the 111.00 handle on Wednesday. The pair has retreated marginally from tops since then while retaining bullish bias on the daily timeframes today. The dollar was last seen changing hands at 110.79, up 0.09% for the day. On the four-hour charts, USDJPY keeps trading above the ascending 20-SMA while the RSI was last seen flirting with the 70 figure, suggesting the index is getting ready for entering the overbought conditions. it is possible that the pair will correct lower marginally before another attack at the 111.00 barrier.
XAUUSD keeps rising for the second day in a row on Thursday amid a weaker dollar demand. As a result, the precious metal has climbed back to the 20-DMA that represents the immediate resistance around $1,720. If the bullion manages to overcome this barrier, the short-term technical picture would improve somehow. However, it looks like the prices will lack upside momentum to extend the ascent as the greenback remains strong and steady. On the downside, the nearest support is now expected at $1,700. Failure to hold above this level would bring recent lows below $1,680 back into market focus. The key barrier for gold bears is represented by the ascending 100-week moving average that arrives around $1,660.
Despite the overall dollar demand has eased, USDCHF managed to extend the rally to fresh mid-2020 highs around 0.9472. As a result, the daily RSI entered the overbought territory. Meanwhile, on the hourly charts, the prices are targeting the 20-SMA as the pair has retreated from the mentioned peaks in recent trading. If USDCHF fails to hold above this moving average (today at 0.9446), the dollar could erase intraday gains by the end of the trading day. On the upside, a retest of the 0.9470 area looks likely following some short-term correction. In this scenario, the prices will target the 0.9500 barrier next.