The common currency is directionless at this stage, with both upside and downside potential looking limited
EURUSD turned red on Wednesday following a short-lived bounce. The pair dipped to local lows around 1.2115 before trimming intraday losses slightly. In general, the common currency is directionless at this stage, with both upside and downside potential looking limited. On the four-hour charts, the technical picture has deteriorated somehow following a break below the ascending 20-SMA that now arrives at 1.2145. If the pressure intensifies any time soon, the pair could derail the 1.2100 figure. In this scenario, EURUSD would retarget the 200-SMA on the four-hour timeframes last seen nearly one week ago. Today, this moving average arrives at 1.2073.
The cable extended gains to late-February highs around 1.4166 on Tuesday before trimming gains. Today, the pair turned marginally lower as dollar demand has picked up somehow. Still, the pound so far manages to stay above the 1.4100 figure, suggesting bearish risks are limited. In a wider picture, GBPUSD remains elevated, being further supported by the ascending 20-week simple moving average. Despite the pair failed to preserve recent gains, the upside momentum persists and could intensify in the short term, sending the prices to fresh multi-week highs. The next bullish target arrives at 1.4180, followed by the 1.4200 barrier.
USDJPY has been oscillating around the 20-DMA since the start of the week. The pair still struggled to regain the 109.00 figure, being confined within a limited trading range these days. On the downside, the immediate support is represented by the 108.50 region, followed by the 108.30 area and 108.00. As long as the greenback stays above this figure, downside risks are limited. On the hourly charts, the pair was last seen flirting with the 20-SMA, a break below which would mark some deterioration in the immediate technical picture. On the bullish side, a decisive break above the 109.00 barrier would attract more buyers.
The Kiwi extends the pullback from three-month highs seen on Monday around 0.7300. The pair slipped to 0.7220 on Wednesday, now threatening the 20-DMA that has been acting as support since mid-April. Furthermore, the daily RSI is pointing south in neutral territory, suggesting the New Zealand dollar will likely stay on the defensive in the short term. However, on the weekly timeframes, downside risks are limited as long as the pair stays above the key 20-SMA that arrives at 1.7170. On the upside, a decisive break above the 0.7300 barrier is needed to mark the renewed upside momentum.
The Aussie made failed bullish attempts at the beginning of the week and has been struggling since then. Following a modest bounce seen on Tuesday, the pair is back under the selling pressure today, trying to cling to the 0.7800 figure during the European hours. Earlier in the day, the Australian dollar slipped to this week’s lows around 0.7785. as such, the daily RSI has reversed marginally lower, suggesting the pair could stay on the defensive in the short term. However, fresh recovery attempts are possible as well. On the positive side, AUDUSD continues to stay above the ascending 20-DMA that represents the key short-term support around 0.7765.
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