As long as the New Zealand dollar stays above the 0.7100 figure the bearish potential is limited
The USD index is now back below the 94.00 figure but refrains from deeper losses as risk-off sentiment dominates global financial markets. The euro has been trending lower for the third session in a row today. The pair is now back below the 20-DMA to settle just under the 1.1600 figure during the European hours. EURUSD extended losses to the 1.1585 area before bouncing marginally. In the immediate term, it looks like the downside potential is limited. However, should the ECB express a dovish and cautious tone on Thursday, the selling pressure surrounding the common currency will intensify. In this scenario, EURUSD could retarget the recent lows around 1.1525 if the 1.1570 intermediate support gives up.
The cable peaked at 1.3830 on Tuesday to erase intraday gains and finish unchanged. Today, the pair struggles to regain the upside bias, holding below a slightly descending 100-DMA that represents the key barrier around 1.3780. In the short term, GBPUSD needs to hold above 1.3720 in order to stay afloat and resume bullish attempts eventually. Otherwise, the pound could challenge the 20-DMA that arrives at 1.3670. On the four-hour timeframes, the prices are now stuck between the key moving averages, with the RSI looking directionless in the neutral territory, suggesting the pair could spend some time in a consolidation mode before deciding on the further direction. GBPUSD was last seen clinging to the lower end of the intraday range, down 0.27% on the day.
Against the backdrop of less upbeat risk sentiment, the safe-haven yen demand reemerged on Wednesday, pushing the USDJPY pair below the 114.00 figure. The prices extended the downside correction to the 113.50 region, with the focus now shifting to 113.40. A break below this zone would pave the way towards mid-October lows in the 113.20-113.00 area. However, the bearish potential could be limited in the short term, as the pair managed to bounce from the mentioned intraday lows and was last seen changing hands around 113.75, down 0.345 on the day. Also on the positive side, the hourly RSI has reversed north during a bounce from the 30 figure. In a wider picture, the technical outlook remains relatively upbeat.
The Kiwi failed to challenge the 0.7200 barrier on Tuesday and has been correcting since then. Today, the pair slipped to 0.7130 before bouncing slightly as the US dollar remains relatively resilient despite the upside momentum has waned these days. The technical picture on the daily charts looks mixed, as the RSI is pointing south while the prices keep holding above the key moving averages. As long as the New Zealand dollar stays above the 0.7100 figure where the 200-DMA arrives, the bearish potential is limited. On the four-hour timeframes, the recovery momentum is capped by the 20-SMA, suggesting NZDUSD would stay on the defensive in the immediate term. On the upside, the immediate resistance now arrives at 114.00б followed by the 114.20 region.
USDCAD has been trending higher for the fifth session in a row. Despite the upside momentum looking too modest these days, the pair managed to derail the 1.2400 figure for the first time in over a week to register local highs around 1.2430. as such, the prices are approaching the descending 20-DMA that could act as the immediate resistance and cap the bullish impetus in the short term. If this moving average (today at 1.2460) gives up, the dollar would target the 200-DMA that arrives marginally below the 1.2500 figure. A daily close above 1.2400 would be a confirmation of the latest breakout. However, USDCAD needs to overcome the 1.2500 barrier in order to see more robust gains.