In a wider picture, it looks like EURUSD could resume the ascent after some downside correction
EURUSD failed to confirm a break above the 100-DMA on Tuesday, extending the pullback from fresh highs around 1.2080 on Wednesday. At the time of writing, the pair was challenging the 1.2000 figure, a break below which would bring more intense selling pressure in the short term as dollar demand has reemerged following the recent sell-off. As a result, the daily RSI reversed south in the neutral territory, suggesting the path of least resistance appears to the downside at this stage. In a wider picture, however, it looks like EURUSD could resume the ascent after some downside correction and break above the mentioned moving average (today at 1.2055) eventually. In this scenario, the euro could overcome the 1.2080 intermediate barrier to target the 1.2100 hurdle next.
GBPUSD peaked at 1.4000 on Tuesday before reversing the latest gains later in the day. Today, the cable struggles for direction, trying to stay afloat despite some recovery in dollar demand amid the prevailing risk-off tone in stock markets. The pair has settled around 1.3935, off intraday lows seen at 1.3909 earlier in the day. As long as the prices stay above the 1.3900 figure, downside risks surrounding the pound look limited. On the hourly charts, GBPUSD is flirting with the descending 20-SMA while the RSI looks directionless, pointing to a neutral technical picture in the short term.
USDJPY has been trending south for the eighth consecutive session on Wednesday. The pair extended losses to fresh early-March lows around 107.87 earlier in the day, trying to cling to the 108.00 figure during the European hours. A daily close below this level would bring more selling pressure, with the next bearish target coming at 107.80. If this zone gives up, the 107.00 figure will come back into market focus. On the upside, USDJPY needs to stage a decisive recovery above 109.00 in order to regain the 20-DMA that arrives today at 109.42. As long as the pair stays below this moving average, downside risks continue to persist. For the time being, it looks like the path of least resistance remains to the downside.
Gold prices made another failed attempt to break above the $1,790 intermediate resistance earlier in the day before turning flat in recent trading. The bullion managed to bounce from the 20-DMA last week but still lacks upside momentum to regain the $1,800 target these days. Today, recovery attempts are capped by a marginally stronger dollar. It is possible that the XAUUSD pair could fail to hold above the $1,775 region in the short term. In this scenario, the yellow metal could target the $1,760 region that represents the next support zone. On the hourly charts, the technical picture has deteriorated somehow following a break below the 20-SMA.
USDCHF has been creeping higher for the second day in a row on Wednesday. At the start of the week, the pair dipped to early-March lows around 1.9130 and has been erasing losses since then. However, the dollar lacks upside momentum to stage a more robust recovery, suggesting the bullish potential is limited at this stage, with downside risks persisting. The immediate target for USD bulls now arrives at 0.9200, followed by the 0.9230 area. On the downside, failure to hold above the mentioned lows would pave the way towards the 100-DMA that arrives just below the 0.9100 figure. On the four-hour charts, the pair was last seen flirting with the 20-SMA while the RSI is pointing lower, adding to signs of limited recovery potential.