The euro needs to confirm the latest breakout on a daily closing basis in order to extend the ascent
EURUSD rallied to late-February highs above 1.2200 on Tuesday as the USD index keeps losing ground across the board amid the prevailing risk-on sentiment. The pair peaked at 1.2223 and was last seen clinging to the upper end of the extended trading range. Today, the common currency has been rising for the fourth day in a row already, extending the bounce from the ascending 20-DMA that arrives just below the 1.2100 figure. Now, the euro needs to confirm the latest breakout on a daily closing basis in order to extend the ascent and avoid a bearish correction amid profit-taking. The next upside barrier arrives around 1.2240.
The cable rose to three-month highs around 1.4220 in recent trading, also due to a weaker dollar. The pair exceeded the 1.4200 figure for the first time since late-February and could see more gains ahead. However, as the daily RSI is nearing the overbought conditions, the pound could see a correction from this year’s highs around 1.4233. If so, the prices may get back below 1.4200 but the retreat should be limited in the short term as the greenback will likely stay on the defensive ahead of the upcoming FOMC meeting minutes due on Wednesday. If GBPUSD exceeds the mentioned 2021 highs, the pair would target three-year highs above 1.4250.
USDJPY was rejected from the 109.80 region last week and has been losing ground since then. On Tuesday, the pair dipped to nearly one-week lows around 108.85 where the slightly ascending 20-DMA arrives. A break below this moving average would bring more selling pressure surrounding the greenback that could send the prices to this month’s lows in the 108.30 region. On the upside, the immediate resistance now arrives at 109.30, followed by the 109.50 area and the mentioned local peaks at 109.80 that cap the way towards the 110.00 barrier last seen in early-April.
USDCAD plunged to six-year lows lust above the 1.2000 figure on Tuesday. The pair failed to settle above the 20-DMA last month and has been losing ground since then, following this descending moving average, today at 1.2250. The daily RSI has settled in oversold territory but continues to point south, suggesting the pair could see more losses in the short term before a reversal takes place. If the dollar fails to hold above the 1.2000 level, the prices would target the 1.1945 area next. On the upside, the immediate resistance is now represented by the 1.2070 area, followed by the 1.2100 figure. On the four-hour timeframes, USDCAD is now below the 20-SMA, adding to a downbeat short-term technical picture.
USDCHF slipped to nearly three-month lows amid broad-based dollar weakness on Tuesday. The pair dipped to 0.8965 before bouncing slightly in recent trading. The technical picture has deteriorated further after a break below the 0.9000 figure. As a reminder, last week, the dollar dipped under the key moving averages. Despite the plunge, the daily RSI hasn’t entered the oversold territory just yet, suggesting there is room for further downside at this stage. On the shorter-term timeframes, however, the oversold conditions imply that the selling pressure could ease at least. Should the pair proceed to recovery, the 0.9000 handle would act as the immediate resistance.