As long as the euro stays below this moving average, downside risks persist
Dollar demand reemerged today despite a more upbeat risk sentiment. EURUSD dipped to fresh weekly lows around 1.1766 and was last seen changing hands at the lower end of the range, down 0.40% on the day. In the process, the euro dipped below a slightly ascending 20-DMA, today around 1.1800. As long as the prices stay below this moving average, downside risks persist. Should the selling pressure intensify in the near term, EURUSD would see deeper losses, with the initial target arriving at 1.1750 last seen in late-August. On the four-hour charts, the prices have settled below the ley moving averages while the RSI is pointing lower, approaching the oversold territory, suggesting there is room for further losses in the near term.
The cable failed to overcome the 1.3855 intermediate resistance during the ascent seen on Wednesday to turn negative today. The pair reversed yesterday’s gains amid the resurgent demand for the US dollar. On the other hand, the pound has been holding above the 1.3800 figure so far today, also deriving support from the 20-DMA which arrives at 1.3780. During the downside correction, the pair slipped below the 200-DMA (today at 1.3830) and was last seen changing hands marginally above 1.3800, down 0.17% on the day. In a wider picture, the bullish potential has been capped by the 20-week SMA since June, and it looks like the prices will stay below this barrier in the days and weeks to come as the greenback could stay on the offensive due to a hawkish tone from the Federal Reserve.
USDJPY briefly plunged to one-month lows just above the 109.00 figure yesterday to trim losses to 109.35 by the closing bell. On Thursday, the dollar bounced marginally but still lacks recovery momentum to get back above the 109.50 intermediate resistance during the European hours. Earlier this week, the common currency dipped under the 20- and 100-DMAs, adding to a more bearish technical picture. On the positive side, a slight bullish bias in the daily RSI suggests that downside potential could be limited from here. Should the greenback get back above the mentioned intermediate barrier, the market focus will shift back to the 110.00 figure seen earlier this week.
The cross has been losing ground for the third day in a row on Thursday as the safe-haven yen demand prevails in the market. The euro extended losses to more than three-week lows around 128.70 and was last seen clinging to the lower end of the extended trading range, down 0.34% on the day. The selling pressure has intensified since yesterday when the pair failed to regain the key moving averages. On the hourly timeframes, the RSI has entered the oversold territory, suggesting the euro could proceed to a bullish correction in the short term. In a wider picture, EURJPY has been losing ground for the second week in a row, having accelerated the decline this week.
USDCAD briefly exceeded the 1.2700 figure to notch fresh weekly highs on Wednesday but failed to preserve gains and finished around intraday lows in the 1.2620 area. Today, the pair turned marginally positive on the day but still struggled to regain the 20-DMA. The dollar was last seen challenging this moving average which arrives around 1.2635, lacking the bullish impetus to stage a more robust recovery. On the four-hour timeframes, the technical picture looks neutral for the time being, with the RSI directionless around the 46 mark while the prices are stuck between the key moving averages, suggesting USDCAD could struggle for direction in the immediate term. In a wider picture, the dollar needs to regain the 1.2700 figure on a daily closing basis in order to regain a sustained bullish bias.