EURUSD is hovering around early-November lows seen at 1.1665 and could suffer deeper losses
The USD index surged to fresh 2021 highs earlier today before a slight pullback pushed the greenback marginally lower. However, the persistent risk-off tone helped the dollar regain upside momentum during the European hours as traders continue to digest more hawkish rhetoric from the US central bank. As such, EURUSD is hovering around early-November lows seen at 1.1665 and could suffer deeper losses in the short term as recovery attempts keep failing. On the four-hour charts, the common currency has been trending lower below the 20-SMA, adding to a downbeat immediate technical picture. However, the RSI on the same timeframes has turned flat, suggesting the downside momentum could slow in the near term.
The cable extended losses to one-month lows around 1.3610, threatening the 1.3600 figure ahead of the weekend. Earlier in the week, the pair failed to hold above the 20- and 200-DMAs, so the downside pressure has intensified since then as the dollar remains on the offensive across the board. The daily RSI is pointing south but is yet to enter the oversold territory, which implies that the pound could see deeper losses before a bounce takes place. The near-term technical outlook would deteriorate further if the 1.3600 figure gives up. In this scenario, GBPUSD could target the 1.3590 area, followed by the 1.3570 zone that triggered a recovery last month. On the hourly charts, the cable is entering the oversold territory but could extend the decline due to a lack of positive drivers.
USDJPY briefly jumped to the 110.20 area on Thursday but failed to preserve gains and finished lower. During the retreat, the pair dipped below the 20-DMA and was last seen flirting with the 100-DMA, today at 109.60. If this moving average gives up anytime soon, the dollar could threaten the 109.50 region. However, it looks like the bearish pressure would be limited at this stage despite the safe-haven yen demand prevails for the time being. On the upside, USDJPY needs to regain the 20-DMA (today at 109.80) in order to get back above the 110.00 figure. On the four-hour timeframes, the immediate technical picture has deteriorated after the pair dipped under the 20-SMA in recent trading.
Gold prices have been struggling these days amid the persistent dollar strength. The bullion has settled around the 20-DMA this week, staying below the $1,800 figure that represents the immediate target for bulls. The yellow metal has settled within a limited trading range, struggling to overcome the 20-DMA which in turn represents a barrier on the way towards the $1,800 mark. On the downside, this week’s lows around $1,770 act as the key support zone at this stage. As long as the prices stay above this level, downside risks are limited. The XAUUSD pair was last seen changing hands just below $1,783, nearly unchanged for the day. In a wider picture, the outlook for gold looks neutral as the prices are now stuck between the 20- and 100-week SMAs which arrive at $1,809 and $1,750, respectively. in general, the bullion looks relatively steady following a brief plunge to mid-2020 lows last week.
The Kiwi extended losses to the 0.6800 figure last seen in November. The pair has been declining for the fifth day in a row on Friday, struggling to regain upside momentum amid widespread strength in the dollar. Earlier in the week, the New Zealand dollar plunged below the 20-DMA while the daily RSI is pointing to the downside, suggesting the pair could stay under pressure in the near term. If the 0.6800 level fails to withstand the pressure, the pair could see fresh lows around 0.6780, followed by the 0.6760 figure where the 200-week SMA arrives. On the upside, the immediate resistance is now expected at 0.6840 where the intraday highs lie.