The euro could stay on the defensive in the immediate term
The euro came back under some selling pressure on Tuesday amid a stronger dollar and mostly downbeat economic updates out of Europe. The pair failed to regain the 1.2200 figure yesterday to dip back below the 20-DMA in recent trading. So far, the pair derives support from the 1.2165 area but could see deeper losses in the short term if the greenback manages to stay afloat. In a wider picture, however, the common currency remains within a broader uptrend and will likely resume the ascent following the current consolidation. On the four-hour timeframes, the pair is stuck between the 100- and 20-SMAs, with the bearish bias prevailing for the time being, which implies the euro could stay on the defensive in the immediate term.
The cable is once again flirting with the 20-DMA on Tuesday, turning negative on the day following two bullish sessions in a row. The pair failed to challenge the 1.4200 figure during the ascent and retreated marginally as a result. On the other hand, the pound keeps holding above the 1.4130 region that represents the immediate resistance followed by the 1.4100 figure. On the four-hour charts, the technical picture looks bearish as the prices are trending lower while the RSI is pointing south. Furthermore, the pair dipped below the key moving averages in recent trading, suggesting the cable would struggle to erase intraday losses in the near term.
USDJPY erases yesterday’s losses, climbing back above the 20-DMA earlier in the day. The dollar encountered local resistance around 109.55, staying shy of yesterday’s highs seen 109.63 while the key upside target arrives at 110.00, followed by the 110.30 area. On the positive side, the daily RSI has reversed slightly higher following the recent decline. In the short term, bearish risks are limited as long as the prices stay above the 109.00 figure. In a wider picture, the technical picture has deteriorated somehow since May but the overall outlook remains relatively upbeat at this stage. The 200-week at 108.87 remains in focus as long as the selling pressure prevails.
Gold prices turned marginally negative on Tuesday as the dollar regains ground nearly across the board. The precious metal peaked at $1,916 last week and has been hesitating since then. The prices briefly dipped to $1,855 for the first time since May 19 on Friday before bouncing. Today, the XAUUSD pair oscillates around the $1,900 figure, struggling to overcome this immediate barrier. In the short term, a decisive break above $1,900 could bring the multi-month tops of $1916 back on the buyers’ radars. On the positive side, the yellow metal has been holding above the ascending 20-DMA since the start of the week. As long as the prices stay above this moving average (today at $1,880), downside risks are limited in the short term.
The Aussie turned negative on Tuesday following two days of gains. The pair peaked at 0.7765 at the start of the week but failed to preserve upside momentum and was last seen flirting with the 20-DMA. A break below this moving average (today at 0.7740) would pave the way towards the 0.7725 area where the 100-DMA lies. as long as the prices stay above this support zone, downside risks are limited, with the directionless daily RSI pointing to a neutral short-term technical picture. On the hourly charts, the Australian dollar has been holding above the 100- and 200-SMAs since last Friday, also suggesting the bearish potential is limited.