If the upside pressure persists in the short term, the USD index would climb to 2021 highs in the 93.70/75 area
The USD index rallied to fresh monthly highs around 93.60, keeping its march north unchanged for the third session in a row on Tuesday. If the upside pressure persists in the short term, the index would climb to 2021 highs in the 93.70/75 area seen on August 20. Against this backdrop, EURUSD slipped to fresh August 20 lows around 1.1670. Now, the common currency threatens the 1.1660 area, a break below which would pave the way towards the 1.1600 figure last seen nearly one year ago. On the upside, the immediate resistance is now represented by the 1.1700 figure. On the four-hour charts, the technical picture looks bearish, with the RSI pointing south while the prices have settled below the 20-SMA, today at 1.1713.
The cable is back under pressure following a slight bounce witnessed at the beginning of the week. The pair failed to hold above the 1.3700 figure on a daily closing basis to turn negative again on Tuesday. The pound dipped to the 1.3633 area and was last seen changing hands around the lower end of the range, down 0.41% on the day. On the positive side, as long as the prices stay above the 1.3600 figure that capped losses last week, downside risks remain limited despite the dollar’s bullishness. In a wider picture, the technical outlook for GBPUSD peeks deteriorating as the pair has been retreating from the 20-week SMA for the fourth week in a row.
USDJPY has been rallying for the fifth day in a row on Tuesday. The dollar extended the ascent to early-July highs in the 111.40 area before retreating slightly during the European hours. Now, the pair needs to confirm a break above the 111.00 figure on a daily closing basis in order to extend the advance to fresh multi-month highs. Of note, despite a strong rally, the daily RSI hasn’t entered the overbought territory just yet, suggesting the greenback could see more gains before correcting lower amid profit-taking. On the downside, the 111.00 handle now represents the immediate support, followed by the 110.75 area. On the four-hour charts, the overbought conditions imply that USDJPY could struggle to notch fresh highs in the near term.
Gold prices failed to overcome the $1,760 intermediate resistance at the beginning of the week to finish unchanged yesterday. On Tuesday, the bullion came under renewed selling pressure to dip towards $1,735 for the first time since August 11. Following the initial decline, the precious metal managed to trim intraday losses to the $1,742 area but still was on the defensive during the European hours. Gold prices keep struggling below the 20-DMA since mid-September and could see deeper losses in the coming days. The yellow metal needs to get back above the mentioned moving average (today at $1,780) in order to retarget the $1,800 psychological level. On the downside, a break below $1,735 would pave the way towards the $1,717 region, followed by the $1,700 figure last seen in early-August.
The Kiwi climbed marginally on Monday before resuming the decline today. The pair slipped from the 0.7000 figure to extend losses to the 0.6960 area last seen one month ago. If this region fails to withstand the selling pressure, the 0.6930 zone would come into the market focus. On the upside, a decisive recovery above 0.7000 looks unlikely in the immediate term, with downside risks persisting for the time being, especially as the prices have settled below the key moving averages while the daily RSI is pointing lower but is yet to enter the oversold territory, suggesting there is room for further losses at this stage. On the hourly timeframes, the technical picture looks bearish as well.