The greenback derives support from Fed rate hike expectations
The dollar continues to rally nearly across the board due to hawkish hints from the Fed along with strong economic data. As a result, EURUSD extended losses to fresh lows around 1.1725 on Tuesday. Now, the pair could threaten the 1.1700 handle, a break below which would add to a bearish technical picture. Of note, the daily RSI hasn’t yet entered the oversold territory, suggesting there is room for further losses in the short term. On the other hand, the euro could stage a bounce from the mentioned lows to trim recent losses. In this scenario, EURUSD needs to regain the 1.1770 region that acts as the intermediate resistance on the way towards the 20-DMA, today at 1.1810.
The cable dipped to fresh local lows around 1.3835 earlier in the day before bouncing marginally in recent trading. The pair was last seen changing hands around 1.3860, up just 0.11% for the day. On the upside, the immediate resistance is still represented by the mentioned 100-DMA, today at 1.3920 while the intermediate target arrives at 1.3900. Of note, the pound remains stuck between the 20- and 100-DMAs these days, which implies that the pair lacks directional impetus while holding relatively resilient considering dollar strength. On the four-hour timeframes, GBPUSD struggles for direction as well. The pair needs to overcome the 20-SMA (today at 1.3880) in order to see a more robust recovery in the short term.
Gold prices stabilized around $1,730 on Tuesday, struggling for direction after a sell-off witnessed yesterday. The bullion briefly plunged to the $1,673 region to bounce to the mentioned region eventually. Despite the precious metal came off lows, the market looks vulnerable, with downside risks persisting, especially as the greenback derives support from Fed rate hike expectations. On the upside, the immediate target for bulls now arrives around $1,760 while the key resistance is represented by the $1,800 figure. On the four-hour timeframes, the RSI is attempting to recover from the oversold territory, but downside risks seem to persist in shorter-time charts as well. A daily close below $1,700 would mark the remaining weakness in the market.
The Aussie turned marginally higher on Tuesday following two days of losses. Earlier in the day, the pair dipped to July 21 lows around 0.7315 before rebounding. Despite the bounce, the bullish potential looks limited with downside risks persisting as the US dollar remains buoyed in general. On the hourly timeframes, AUDUSD has settled marginally above the 20-DMA while the RSI looks directionless around the 50 mark, suggesting the near-term technical outlook is neutral for the time being. In a wider picture, the pair has settled in a tight trading range on the weekly charts, with bearish risks limited as long as the prices stay above the 200-week SMA that arrives just below the 0.7300 figure.