Failure to hold above the 1.1550-1.1540 area would bring the common currency back to mid-2020 lows seen at 1.1530 last week
The dollar holds steady as investor sentiment turned sour, fueling the safe-haven demand for the greenback. Earlier in the day, the USD index faded part of yesterday’s advance but stayed close to yearly highs. Against this backdrop, the euro was rejected from intraday highs around 1.1570, still struggling to regain the 1.1600 figure. EURUSD was last seen changing hands around 1.1555, up just 0.06% on the day. On the downside, failure to hold above the 1.1550-1.1540 area would bring the common currency back to mid-2020 lows seen at 1.1530 last week. If this level fails to act as support, the pair may extend losses to fresh lows and even threaten the 1.1500 psychological handle. In the immediate term, however, the technical picture looks neutral, with the euro flirting with SMAs in the shorter-term timeframes.
The cable keeps trading below the descending 20-DMA as yesterday’s recovery attempts failed at 1.4670 to bring the pair back below the 1.3600 handle eventually. Today, the pound sees a modest bullish intraday bias, flirting with this level during the European hours. Earlier in the day, the pair derives support from the 1.3570 zone to bounce marginally. However, it looks like GBPUSD will lack upside momentum in the near term to stage a more robust ascent as the greenback remains on the offensive due to risk aversion. On the four-hour charts, the technical picture looks neutral for the time being, with the RSI looking directionless while the prices have settled around the key moving averages.
USDJPY rallied strongly at the beginning of the week, staying bullish on Tuesday. Furthermore, the pair climbed to fresh three-year highs around 113.50 earlier in the day before retreating marginally. Still, the prices stay above the 113.00 figure that represents the key immediate support at this stage. In the near term, the dollar could refrain from rallying to fresh long-term tops as the daily RSI is signaling overbought conditions to settle above the 70 figure. On the hourly timeframes, the greenback was last seen trying to correct bac above the 20-SMA, flirting with the 113.30 area during the European hours.
Gold prices have been stuck in a tight range since the beginning of the week, struggling to overcome the descending 20-DMA. The bullion lacks upside momentum as the dollar remains steady and elevated across the market. On the upside, the bullion needs to see a decisive break above the mentioned moving average, today at $1,757, in order to retarget the $1,780 region that represents the intermediate barrier on the way towards the $1,800 figure last seen in mid-September. However, it looks like gold prices would stay below this figure as long as the dollar continues to trade within a strong bullish trend. In the near term, the XAUUSD pair could make fresh recovery attempts around $1,760. In a bearish scenario, the yellow metal could get back below the $1,750 region to challenge the $1,745 area.
The Kiwi has been surging for the fourth day in a row on Tuesday despite the prevailing dollar strength. Still, the pair has been struggling to overcome the 0.6960 area since late last week, lacking upside momentum to overcome this intermediate barrier on the way towards the 0.700 figure. Of note, there is another barrier represented by the descending 20-DMA, today at 0.7975. As long as the prices stay below this level, the bullish potential remains limited. On the downside, the immediate support is expected at 0.6935, followed by the 0.6010 area and the 0.6900 figure. In a wider picture, the New Zealand dollar needs to overcome the 100-DMA (today at 0.7030) in order to shrug off the current weakness.