The European currency faces downside risks as long as the prices stay below the key 20-DMA
The euro preserves a slightly bullish tone as the safe-haven dollar demand has been abating since Wednesday. Against this backdrop, EURUSD managed to stage a bounce from fresh four-month lows around 1.1700, up to the 1.1785 region that caps further gains ahead of the weekend. The daily RSI has rebounded somehow from the 30 figure but looks flat now, suggesting the pair will likely struggle for direction at this stage. Despite the recent rebound, a decisive break above 1.1800 looks unlikely so far, as the greenback is relatively steady in this pre-holiday trading. In a wider picture, the European currency faces downside risks as long as the prices stay below the key 20-DMA that arrives at 1.1857 today.
GBPUSD retains upside bias on Friday and was last seen flirting with the 20-DMA in the 1.3840 area. A decisive break above this moving average would pave the way towards the 1.3920 figure, followed by the 1.4000 psychological mark last seen on March 18. However, as the bullish momentum has slowed in recent trading, it looks like the cable could struggle around the mentioned moving average in the near term. Furthermore, a downside correction from the current levels could be expected as well. On the four-hour charts, the pound was last seen trading just at the 100-SMA while the RSI looked directionless, which implies that the short-term technical picture could stay relatively neutral for the time being.
USDJPY retreated from fresh one-year peaks around 111.00 earlier in the week and has been retaining a bearish bias since then. However, the downside momentum looks limited, with the pair deriving support from the 110.35 area on Friday. If this zone withstands the pressure, the greenback would resume the ascent and could overcome the mentioned barrier eventually. If so, the 111.30 region will come into market focus for the first time since March 2020. On the hourly timeframes, the prices are now stuck between the 20- and 100-SMAs, suggesting the pair could stay in a tight range ahead of the weekend in thin pre-holiday trading.
The cross peaked at two-week highs around 130.30 earlier in the day before retreating into negative territory in recent trading. It looks like the pair is losing upside momentum following a three-day rally that took the prices above the 20-DMA. Still, upside risks prevail as long as the euro stays above this moving average, today at 129.52. In the immediate term, EURJPY needs to hold above 130.00 on a daily closing basis in order to preserve recent gains and resume the ascent eventually. Otherwise, the 129.80 area, followed by the mentioned moving average will come back into market focus. The pair was last seen trading around 130.13, down 0.07% for the day.
The Kiwi has been rising for the third session in a row on Friday as dollar demand keeps abating these days. The pair extended gains to 1.5-week highs around 0.7040 earlier today before retreating. Still, NZDUSD stayed positive on the daily charts and was last seen changing hands at 0.7024, up 0.16% for the day. A daily and weekly close above the 0.7000 figure would be a confirmation of the latest breakout. In this scenario, the descending 20-DMA (today at 0.7094) will come back into market focus for the first time since mid-March. On the downside, this week’s lows in the 0.6944 area will likely remain intact in the short term.