Despite the recent pullback, the common currency remains bullish and could resume the ascent following a short-lived correction
EURUSD rose to fresh two-month highs around 1.2150 earlier in the day. However, the euro failed to preserve gains and retreated below the flat-line during the European hours. The pair was last seen trading at 1.2120, down 0.05% on the day. Despite the recent pullback, the common currency remains bullish and could resume the ascent following the current correction. If the selling pressure intensifies any time soon, EURUSD could get back below the 1.2100 figure and retarget the 100-DMA that should cap losses and trigger a bounce. Otherwise, market focus will shift towards the 1.2000 figure last seen a week ago. On the upside, a recovery to the mentioned highs would pave the way towards 1.2180, followed by the 1.2200 figure.
The cable peaked at 1.3975 earlier in the day before correcting lower to the flat-line as the selling pressure surrounding the greenback has eased during the European session. As a result, the pair has settled around 1.3935 and could threaten the 1.3900 figure if the dollar derives further support from rising Treasury yields. However, the path of least resistance remains to the upside at this stage. The pound could see some hesitation before a fresh buying wave that could take the prices to last week’s highs around 1.4000. On the hourly charts, GBPUSD slipped below the 20-SMA, suggesting the pair could stay on the defensive in the near term.
USDJPY retains a bullish bias amid the persisting weakness surrounding the Japanese yen. The pair has once again encountered resistance just above the 109.00 figure where the 20-DMA lies. It looks like the dollar will eventually overcome this barrier to regain the 109.30 next resistance. However, the prices could see a pullback in the immediate term as the dollar lacks directional impetus across the market. On the downside, the immediate support is expected at 108.50-108.40. As long as the pair stays above this region, downside risks are limited. In a wider picture, USDJPY has already erased last week’s losses but faces resistance represented by the 200-week SMA.
Gold prices keep trading in a channel limited by the 20- and 100-DMAs. The precious metal failed to challenge the 100-DMA last week and has been oscillating around $1,780 since Monday. Within the range, the XAUUSD pair failed to retain a bullish bias and turned negative on Thursday. If the downside pressure intensifies any time soon, the yellow metal could challenge the ascending 20-DMA that arrives at $1,760 today. Should this moving average give up, the $1,735 area will come back into market focus. However, it looks like bearish risks are limited for the time being. In a wider picture, repeated failures near the $1,800 mark suggest the metal would need an extra catalyst to make a decisive break above this barrier.
The cross has been rising for the fifth consecutive day on Thursday, climbing to October 2018 highs. The pair exceeded the 132.00 figure and was last seen clinging to fresh highs around 132.15. The euro could extend the ascent in the short term, however, the daily RSI has entered the overbought territory, suggesting a pullback could be expected before another bull run takes place. In this scenario, EURJPY will first target the 131.70 area, followed by the 131.40 region. If the rally continues, the next bullish target should be expected at 132.35. On the four-hour charts, the overbought conditions imply that the common currency could see a downside correction in the near term.