Despite the current correction, the overall technical outlook for the euro remains upbeat in a wider picture
EURUSD failed to extend yesterday’s bounce from the 1.2160 area to finish flat on Wednesday. Furthermore, the common currency came back under downside pressure today as the dollar resumed the ascent nearly across the board. As such, the pair dipped to the ascending 20-DMA around 1.2180 before bouncing marginally. Despite the current correction, the overall technical outlook for the euro remains upbeat in a wider picture. Now, the prices need to hold above the mentioned moving average in order to avoid deeper losses in the short term. On the hourly charts, the RSI has reversed north as EURUSD bounced from local lows. On the other hand, the pair is still trading below the key moving averages on the same timeframes.
The cable once again managed to derive support from the ascending 20-DMA to turn marginally positive for the day despite dollar strength. The pair bounced from the 1.4143 figure, targeting the 1.4200 level during European trading. However, it looks like the upside potential will be limited at this stage, with the short-term technical outlook looking neutral. Meanwhile, a broader picture remains bullish as the cable is just slightly off April 2018 highs seen at 1.4250 earlier in the week. On the four-hour timeframes, the pound has exceeded the 20-SMA while the RSI reversed north, suggesting the pair could retain a slight bullish bias today.
USDJPY failed to derail the 110.00 figure on Wednesday despite preserving the upside bias that persists today. The pair bounced from the 109.50 area to touch the 109.85 area before retreating partially. The fact that the dollar refrains from challenging the 110.00 barrier implies that the bullish potential remains limited at this stage, with downside risks persisting albeit has eased after the recent recovery above the 20-DMA that arrives around 109.20 today. In a wider picture, the prices are now well supported by the 200-week SMA, today at 108.87, followed by the ascending 20-week SMA that arrives just below the 108.00 handle.
Gold prices climbed to fresh January highs around $1,916 earlier in the week but failed to preserve gains and resumed the decline on Thursday. The yellow metal dipped to the $1,890 area before bouncing slightly in recent trading. A daily close below the $1,900 figure would be a sign of some deterioration in the short-term technical picture. The daily RSI has corrected from the oversold territory and was last seen pointing south. On the downside, the key immediate support is represented by the $1,880 area, followed by the ascending 20-DMA that now arrives at $1,871. The longer-term outlook for the bullion remains upbeat as the prices are just slightly off the mentioned multi-month highs.
The Kiwi has been losing ground for the third day in a row on Thursday. The pair dipped under the 20-DMA while holding above the 0.7200 figure during the European hours. If this level withstands the selling pressure, a bounce could be expected in the short term. Should the decline accelerate, the prices may target the 100-DMA that arrives at 0.7177. Of note, the daily RSI is pointing south in neutral territory, suggesting the New Zealand dollar will likely stay on the defensive in the near term. On the four-hour charts, the pair was last seen flirting with the 200-SMA around 0.7220. On the upside, the immediate resistance is now expected at 0.7230 where the mentioned 20-DAM arrives.