It looks like the European currency would remain capped by the moving average and could witness another sell-off in the short term
As the greenback came under some selling pressure ahead of the outcome of the two-day Federal Reserve meeting, EURUSD turned slightly higher on Wednesday. The pair derived support from the 1.1575 region and climbed back to the 1.1600 figure. However, the common currency still lacks the upside momentum to challenge this level where the 20-DMA arrives. It looks like the pair would remain capped by the moving average and could witness another sell-off if dollar demand reemerges after the Fed meeting due later today. In this scenario, the euro could challenge the 1.1550 region where long-term lows around 1.1525 will come into the market focus. On the hourly charts, the technical picture looks mixed, as the prices have settled above the 20-SMA while the RSI is pointing lower.
GBPUSD attempts to stage a bounce following a three-day losing streak on Wednesday. However, like the euro, the sterling struggles to see a more robust recovery as the dollar stays steady despite a slight bearish bias on the day. The pair derives support from the 1.3600 figure but could see fresh losses if this level fails to withstand the pressure in the near term. If 1.3600 gives up anytime soon, the cable would target the 1.3575 region for the first time since October 13. On the upside, the immediate resistance now arrives at 1.3655, followed by the 1.3700 figure where the 20-DMA arrives. In a wider picture, downside risks persist as long as the prices stay below the 20-week SMA, today at 1.3760. Last week, GBPUSD failed to confirm a break above this moving average.
USDJPY has been trending lower since the beginning of the week. However, the pair continues to derive support from the ascending 20-DMA, today at 113.65. Should this moving average give up, the greenback would retarget last week’s lows in the 113.25 area. If the pair bounces from the mentioned SMA, the prices could easily get back above the 114.00 figure to revisit this week’s highs around 114.45. On the four-hour charts, the pair is flirting with the 100-SMA while the RSI looks directionless, suggesting the immediate technical picture looks quite neutral at this point, with the 114.00 figure staying in the market focus.
The Aussie licks its wounds after a plunge seen on Tuesday. The pair dipped aggressively to October 19 lows around 0.7420 and has been struggling to see a more robust recovery since then. AUDUSD is now back above the 20-DMA but is yet to confirm the breakout on a daily closing basis, as the prices struggle to overcome the 0.7450 intermediate barrier during the European hours. As such, it looks like the Aussie could be rejected from this region later in the day to turn negative again should the US dollar demand pick up across the market. In a wider picture, the pair is set to finish the first bearish week after five weeks of gains in a row.
USDCHF has been struggling to overcome the 200-DMA these days. The pair was rejected from this moving average (today at 0.9150) earlier today to give up most of yesterday’s gains. As a result, the dollar slipped back to the 0.9100 area while the daily RSI reversed lower. Furthermore, the pair is set to finish the fifth bearish week in a row if the prices fail to stage a robust rally in the coming days. On the four-hour timeframes, the technical picture has deteriorated again after a break below the 20-SMA. Should the selling pressure intensify in the short term, USDCHF may revisit the 0.9080 region for the first time in five months. However, it looks like the pair will at least trim losses before the closing bell today.