The common currency remains fragile following five days of losses despite the current retreat in the greenback
The dollar finished higher on Wednesday following the outcome of the Federal Reserve meeting. However, the greenback came under pressure today, falling in tandem with the Treasury yields. Against this backdrop, EUR/USD bounced back above 1.1700 but failed to extend the recovery that was capped by the 1.1730 region early in Europe. The euro was last seen changing hands around 1.1715, up 0.27% on the day. The common currency remains fragile following five days of losses despite the current retreat in the greenback. It is possible that the pair will fail to hold above the 1.1700 figure on a daily closing basis as dollar demand could reemerge at any point. On the hourly timeframes, EURUSD encountered local resistance represented by the 100-SMA to trim some losses in recent trading. On the upside, a decisive break above the 1.1730 region would pave the way towards the 1.1755 area, followed by the 1.1800 key barrier last seen one week ago.
The cable derived support from the 1.2609 area that capped the way towards the 1.3600 psychological support earlier in the day. As a result, the pair bounced higher on the back of dollar weakness. The prices extended the recovery to 1.3683, refraining from challenging yesterday’s highs around 1.3690. If this level gives up anytime soon, a rally above 1.3700 could be expected in the short term. On the downside, the immediate support now arrives around 1.3660, followed by the 1.3610 zone. The overall technical picture looks mixed as the daily RSI reversed higher while the prices remain well below the key moving averages these days. On the positive side, a sustained recovery above the 1.3700 level would pave the way towards the 1.3725 region, followed by the 20-DMA, today at 1.3770. 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.
USDJPY rallied strongly on Wednesday to extend gains today. The pair briefly jumped to the 111.00 figure that capped gains and triggered a local downside correction during the European hours. The dollar was last seen changing hands at 110.85, less than 0.1% up on the day. On the positive side, the pair is now trying to stay above the 20- and 100-DMAs but it is yet to confirm the latest breakout on a daily closing basis. The daily RSI is now pointing higher in the neutral territory, suggesting there is room for further gains in the near term. However, if the greenback fails to hold above the 109.70 area, the 109.35 area would come back into the market focus. In a wider picture, USDJPY continues to oscillate around the 20-week SMA, struggling for a direction below the 111.00 key barrier.
The Kiwi turned positive on Thursday following seven days of losses. The pair dipped to the 0.6980 area before bouncing strongly. The recovery was capped by the 0.7055 region, just below the 100- and 20-DMAs in the 0.7060-0.7070 area. It looks like the New Zealand dollar would need an extra catalyst to overcome this resistance area represented by the mentioned moving averages. On the downside, the pair needs to hold above the 1.7000 figure on a daily closing basis in order to confirm the latest breakout. On the four-hour charts, the technical picture looks upbeat, with the RSI pointing north while the prices have settled above the key moving averages, clinging to the upper end of the extended trading range. If the mentioned resistance gives up anytime soon, the pair would target the 0.7070 region.