It looks like GBPUSD would stay on the defensive in the short term as the dollar remains steady nearly across the board
The dollar looks steady on Monday after a widespread rally as traders are shifting focus to the upcoming Fed’s two-day policy meeting that concludes on Wednesday. Last Friday, the euro slumped to mid-October lows around 1.1535 amid a broad-based rally surrounding the greenback. In the process, EURUSD dipped back below the ley moving averages to finish the week with solid losses. On Monday, the pair bounced slightly from the mentioned lows while staying below both the 20-DMA and the 1.1600 figure which represents the immediate bullish target again. On the downside, the euro could challenge fresh long-term lows below 1.1530 if the upside pressure surrounding the dollar reemerges anytime soon. On the four-hour charts, the technical picture looks downbeat despite the prices seeing a slight bounce from the lower end of the range.
The cable stays under pressure on Monday, extending losses to mid-October lows around 1.3640 during the European hours. Earlier in the day, the pair failed to overcome the 20-DMA which arrives just below the 1.3700 figure and has been struggling to regain the upside bias since then. It looks like GBPUSD would stay on the defensive in the short term as the dollar remains steady nearly across the board as the Fed meeting looms. On the hourly timeframes, the recovery potential is capped by the descending 20-SMA while the RSI is flirting with the 30 figure, adding to a more downbeat short-term outlook. If the mentioned lows give up anytime soon, the next support should be expected at the 1.3620 area, followed by the 1.3600 figure.
USDJPY bounced from the ascending 20-DMA late last week to extend Friday’s gains today. The pair climbed to the 114.45 area before retreating marginally in recent trading. As the upside bias persists, the prices could challenge fresh four-year highs above 114.70 in the coming days to target the 115.00 figure if the Fed delivers a hawkish decision on Wednesday. On the downside, the immediate support is represented by the 114.00 figure, followed by the 113.80 region and the mentioned moving average, today at 113.40. In a wider picture, the overbought conditions on the weekly timeframes imply that the upside potential could be limited from here.
Gold prices dipped to $1,770 on Friday amid a widespread rally surrounding the dollar. As a result, the precious metal finished the week on a downbeat footing. On Monday, the bullion makes some recovery attempts, but the bullish potential looks too modest at this point to bet on more robust gains in the short term. The XAUUSD pair was last seen flirting with the 100-DMA just below the $1,790 zone, with the $1,800 figure representing the immediate key resistance. On the downside, the 20-DMA acts as the nearest support, followed by the mentioned lows. Should the yellow metal see a stronger bounce in the near term, last week’s highs around $1,810 will come back into the market focus. For the time being, it looks like the path of least resistance is to the downside.
The Aussie was rejected from the 200-DMA on Friday as the rally faded amid the renewed strength surrounding the greenback. The pair looks directionless around 0.7500 during the European hours after a brief dip towards 0.7485 earlier in the day. The immediate upside barrier is now represented by the 0.7525 area, followed by the mentioned moving average, today at 0.7555. The technical picture on the daily charts looks mixed, as the daily RSI is pointing south while the prices are stuck between the key moving averages. Anyway, the pair remains bullish as long as the prices stay above the ascending 20-DMA, today at 0.7420. On the four-hour timeframes, the upside potential is capped by the 20-SMA for the time being.