For now, it looks like the cable will retain a bullish bias as the dollar remains on the defensive across the board
The dollar retreats across the market, with the USD index challenging new 3-week lows around 93.60 during the European hours. Against this backdrop, EURUSD surged past the 20-DMA to notch October highs around 1.1660 on Tuesday, climbing for the fifth day in a row already. If risk sentiment stays positive in the near term, the pair would preserve gains but a decisive break above the 1.1700 figure looks unlikely at this stage. On the downside, the immediate support now arrives at 1.1615 where the descending 20-DMA lies. As long as the common currency stays above the 1.1600 figure, downside risks are limited in the short term. However, the dollar remains within a broader uptrend despite the current retreat, suggesting the USD index could regain bullish momentum following the current correction, especially as the Federal Reserve meeting looms.
GBPUSD dipped marginally on Monday to regain the upside momentum today. The pair advanced to one-month highs and was last seen flirting with the 100-DMA. In the process, GBPUSD exceeded the 1.3800 figure but is yet to confirm the breakout on a daily closing basis. If the pound extends the ascent in the near term, the market focus would shift towards the 100-DMA around 1.3845. On the shorter-term timeframes, the RSI has entered the overbought territory, suggesting further gains could be limited in the immediate term. On the downside, the nearest support now arrives around 1.3760, followed by the 1.3720 area. For now, it looks like the cable will retain a bullish bias as the dollar remains on the defensive across the board. Meanwhile, the prices are flirting with the 20-week SMA these days. A decisive break above this moving average on a weekly closing basis could bring further gains in the medium term.
USDJPY peaked at three-year highs around 114.45 on Monday but failed to preserve the upside momentum as the greenback proceeded to a bearish correction today. As such, the pair slipped to the 113.85 area before trimming intraday losses in recent trading. The dollar was last seen changing hands around 114.00, suggesting the bearish potential could be limited in the short term. However, if the selling pressure intensifies, the prices could threaten the 113.70 region, followed by the 113.20 area in the near term. On the hourly charts, USDJPY struggles below the descending 20-SMA, adding to a more downbeat technical picture. In a wider perspective, however, the pair remains within a broader bullish trend while staying around long-term highs.
Following two days of losses, gold prices surged on Tuesday as dollar demand has waned. The bullion derived support from the 20-DMA to exceed the $1,780 region in recent trading. Should gold prices confirm the breakout in the immediate term, the market focus will shift towards the $1,800 psychological level that capped gains last week. So the yellow metal could need an extra catalyst to extend the ascent at this stage. A decisive break above the $1,780 area could push the prices to the $1.800 mentioned barrier. However, the metal will hardly be able to overcome this hurdle on a daily closing basis in the coming days. In a wider picture, the bullion keeps climbing from the $1,720 region seen in late-September on the weekly timeframes. However, the prices still lack the momentum to challenge the 20-week SMA. Should the metal overcome this moving average this week, the technical outlook for gold would improve somehow.