It looks like EURJPY could stay on the defensive in the near term amid the persisting safe-haven yen demand
The euro bounced higher at the beginning of the week but failed to preserve the upside impetus to turn marginally negative on the day on Tuesday. The pair lacks the bullish momentum to overcome the 1.1600 immediate barrier, with downside risks persisting as long as the prices stay below this level. EURUSD dipped to intraday lows around 1.1585 to settle just under 1.1600 in recent trading. Despite the bearish momentum being limited at this point, the European currency could suffer deeper losses in the coming days as the greenback may resume the ascent due to the Federal Reserve. On the weekly charts, the pair is stuck between the 100- and 200-week SMAs, regaining ground modestly after a plunge seen late last week.
The cable has been losing ground for the third day in a row on Tuesday, staying below the key moving averages. The technical outlook has deteriorated further after a break below the 1.3700 figure where the 20-DMA arrives. The pound extended losses to mid-October lows around 1.3630 during the European hours and was last seen clinging to the lower end of the extended intraday range. Should this level give up anytime soon, GBPUSD may target the 1.3600 figure while on the upside, the immediate resistance now arrives at 1.3670, followed by the mentioned 20-DMA. On the hourly timeframes, the pair has been staying below the 20-SMA since late-October, adding to a more downbeat technical picture in the short term.
USDJPY failed to hold above the 114.00 figure at the start of the week to correct lower to the 113.50 area on Tuesday. However, it looks like the pair could derive support from the ascending 20-DMA and climb back to long-term highs seen last month around 114.70 if the greenback capitalizes on the Fed’s potential hawkishness. Otherwise, the pair may see a deeper retreat if the mentioned moving average gives up in the coming days. In the immediate term, the dollar needs to hold above the 113.25 region in order to avoid deeper losses to mid-October lows around 113.00. On the four-hour charts, the technical picture has deteriorated since the pair dipped back below the key moving averages.
Gold prices are marginally higher on Tuesday, still struggling to overcome the immediate resistance represented by the $1,800 figure despite the ascent seen yesterday. The XAUUSD pair keeps flirting with the 200-DMA, a decisive break above which would somehow improve the immediate technical outlook. On the downside, the nearest support arrives around $1,785, followed by the $1,780 zone where the 100- and 20-DMAs lie, respectively. In a wider picture, the outlook remains neutral as long as the prices stay above the ascending 100-week SMA, today at $1,773. On the negative side, the yellow metal could struggle to regain the $1,800 mark if dollar demand reemerges in the coming days.
The cross climbed north on Monday but failed to preserve gains and retreated aggressively today. The pair dipped from the 132.40 area to register mid-October lows around 131.50 earlier in the day before bouncing marginally in recent trading. It looks like the euro could stay on the defensive in the near term as the safe-haven yen demand persists amid the prevailing risk aversion in the global financial markets. Should the selling pressure intensify anytime soon, EURJPY may challenge the 131.30 next support, followed by the 131.00 figure. On the upside, the prices need to regain the 132.00 level first in order to retarget the 132.70 zone, followed by the 133.00 mark.