Despite the recent retreat from fresh long-term peaks, it looks like the upside momentum in the USD/JPY pair could extend to 115.00
After a dip towards three-week lows around 93.50, the USD index regained some traction and climbed back to the 93.85 region due to higher US yields. Against this backdrop, EURUSD encountered resistance around 1.1650 before retreating into the negative territory. The pair was last seen changing hands around 1.1622, down less than 0.1% on the day. Should the greenback come under renewed selling pressure anytime soon, the euro may revisit the 1.1650 area to extend gains to the 1.1670 region that capped the upside momentum on Tuesday. Still, it looks like the common currency would lack the bullish impetus to overcome the 1.1700 barrier in the coming days. Furthermore, EURUSD could get back below the 20-DMA (today at 1.1610) if the safe-haven demand for the greenback reemerges in the short term.
The cable failed to confirm a break above the 100-DMA on Tuesday and turned negative today. The pair is now back below the 1.3800 figure today, challenging the 1.3750 area during the European session. At this stage, it looks like the upside potential is limited, and the pound could see a deeper retreat before buyers reenter the game. The daily RSI is pointing slightly lower in the neutral territory, suggesting GBPUSD could struggle to regain the upside bias in the near term. Furthermore, the bullish potential is capped by the 100- and 200-DMAs, adding to a less upbeat technical picture. On the hourly timeframes, the prices are approaching the 100-SMA while the RSI is moving lower in the neutral zone, which implies that the cable could see deeper losses towards the 1.3720 immediate support as the selling pressure surrounding the greenback has eased somehow.
The Japanese yen dipped to four-year lows versus the US dollar on Wednesday, extending losses amid a more upbeat market sentiment. Earlier in the day, USDJPY rallied to the 114.70 region for the first time since November 2017 before retreating partially during the European hours as risk sentiment has deteriorated somewhat. Despite the recent retreat from fresh long-term peaks, it looks like the upside momentum in the USD/JPY pair could extend to 115.00 in the short term. In the immediate term, a daily close above the 114.50 area would be a confirmation of the latest breakout. On the downside, the nearest support should be expected at 114.20. followed by the 113.85 region. On the four-hour charts, the technical picture looks mixed, as the prices are holding above the 20-SMA while the RSI is pointing slightly lower, correcting from the 70 figure seen earlier in the day.
The Kiwi has been rallying for the sixth day in a row on Wednesday. The pair advanced to early-June highs around 0.7180 earlier in the day before correcting slightly lower in recent trading. Of note, the daily RSI is now flirting with the 70 handle, suggesting the upside momentum could wane before the prices reach the 0.7200 figure amid the overbought conditions. On the downside, the immediate support is expected at 0.7150, followed by the 0.7130 area and the 0.7100 figure. As long as the prices stay above a slightly ascending 20-DMA (today at 0.6985), upside risks persist in the short term. On the weekly timeframes, the technical picture has improved further after a decisive break above the 20-week SMA seen last week while the RSI is pointing north in the neutral territory. As such, following a potential downside correction, NZDUSD could regain the bullish momentum and exceed the mentioned multi-month highs.