Despite the recovery attempts, the common currency remains fragile and vulnerable to fresh losses
As the greenback is off one-week highs on Thursday, EURUSD turned positive for the first time since the beginning of the week. The pair bounced from the 1.1800 psychological figure yesterday to see a slight bounce during the European hours on Thursday. The euro was last seen changing hands around 1.1830, up 0.15% for the day. Despite the recovery attempts, the common currency remains fragile and vulnerable to fresh losses. If the prices fail to hold above the 1.1800 level on a daily closing basis, the 20-DMA (today at 1.1785) would come into play. On the upside, a decisive break above the 1.1850 area would pave the way towards 1.1885, followed by the 1.1900 figure. However, it looks like the path of least resistance remains to the downside at this stage as the dollar remains resilient in general.
The cable jumped north on Thursday following three days of losses. The pair regained the 1.3800 level to advance to the 1.1825 area where the 200-DMA lies. This moving average could cap further gains in the short term as the pound will likely lack bullish impetus to overcome this immediate barrier. In this scenario, the prices could slip back below the 1.3800 handle, followed by a slightly descending 20-DMA, today at 1.3765. If this moving average gives up, this week’s lows in the 1.3725 area will come back into market focus. On the four-hour timeframes, the technical picture looks upbeat, however. The RSI is pointing north in the neutral territory while the prices have settled above the key moving averages, suggesting GBPUSD could at least stay afloat in the immediate term.
USDJPY peaked at mid-August highs around 110.45 on Wednesday and has been correcting lower since then. The selling pressure has intensified today, with the dollar slipping back below 110.00 in recent trading. The prices extended losses to 109.85, trading just above the 20- and 100-DMAs. Should these moving averages fail to trigger a bounce, the greenback may see peeper losses in the coming days. On the upside, a strong recovery above 110.00 would push the pair back to the mentioned highs. On the positive side, the technical picture in shorter-term timeframes is pointing to a slowdown in bearish momentum, suggesting USDJPY could hold above the mentioned moving averages on a daily closing basis.
The Kiwi bounced from the 100-DMA following three bearish sessions on Thursday. The pair extended the recovery to 0.7117 and was last seen flirting with the 200-DMA which caps further gains during the European hours. If the New Zealand dollar lacks the bullish impetus to make a decisive break above this moving average anytime soon, the pair could erase gains as the overall sentiment surrounding the greenback remains upbeat due to hawkish signals from the Federal Reserve. On the hourly charts, upside momentum is now capped by the 100-SMA while the RSI is nearly flat, suggesting the pair could retreat back below 0.7100 on a daily closing basis as the recovery momentum has been fading already.
USDCAD jumped to August 23rd highs around 1.2760 on Wednesday before retreating below 1.2700 by the end of the day. Today, the pair struggles to regain upside momentum after a rejection from the 1.2730 region earlier in the day. The dollar needs to get back above the 1.2700 handle in the immediate term in order to turn positive on the day. Otherwise, the pair could retarget a slightly ascending 20-DMA, today at 1.2630. For the time being, the technical picture looks neutral, with the daily RSI directionless around the 57 figure. In a wider perspective, the outlook has improved on the weekly timeframes following two weeks of solid losses.