As long as the euro stays below the 1.1600 figure, downside risks persist
The euro failed to settle above the 1.1600 figure on Tuesday and came under some downside pressure today. The pair dipped back under the 20-DMA that now represents the immediate resistance. On the downside, the common currency has been deriving support from the 1.1550 region this week. A break below this figure would mark deterioration in the short-term technical picture and could pave the way to deeper losses to the 1.1530-1.1510 area. On the hourly charts, the RSI is pointing north, but bearish risks persist, especially ahead of the upcoming US inflation report that could send the dollar higher across the market. For euro bulls, the key short-term barrier arrives at 1.1600. As long as the prices stay below this level, downside risks persist.
GBPUSD was rejected from the 1.3600 barrier yesterday and has been on the defensive since then. The pair extended the retreat to the 1.3517 area before trimming intraday losses to 1.3535 in recent trading. Still, the path of least resistance remains to the downside at this point amid the dollar’s positive performance. On the downside, the 1.3500 figure is now in the market focus, as the inability to hold above this support zone would pave the way towards the 1.3470 region, followed by 1.3425. In a wider picture, GBPUSD has been further pressured by the descending 20-week SMA since mid-June. A decisive break above 1.3600 would improve the short-term technical outlook for the pair.
After four days of losses, USDJPY attracted some buying earlier in the day and climbed to fresh daily highs around 113.20 during the European hours and was last seen clinging to the upper end if the range. As such, the pair recovered a part of the previous day’s slide to near one-month lows. Despite the recent bounce, it looks like any subsequent move up will meet stiff resistance. In this context, the 113.60 area could attract fresh supply and push the prices back below the 113.00 figure. Furthermore, there is another intermediate resistance represented by the 20-DMA, today at 113.80. In other words, the USDJPY pair may yet challenge the lows around 112.70 in the coming days.
Gold prices extended a four-day winning streak to two-month highs around $1,732 on Tuesday. Today, the bullion turned negative as failure to overcome the mentioned barrier triggered some profit-taking. As a result, the XAUUSD pair dipped to $1,825 during the European session, holding above the $1,820 area that could attract demand if the selling pressure intensifies in the short term. In this scenario, the precious metal could climb back to the mentioned highs and overcome the $1,834 region for the first time since mid-June. On the four-hour timeframes, the bullion derives support from the ascending 20-SMA, today at $1,819. In general, it looks like the path of least resistance is to the upside at this point. However, gold could see deeper losses before another rally takes place.
The Aussie dipped to multi-week lows around 0.7350 earlier in the day to stage a modest bounce in recent trading. Still, the pair failed to enter positive territory on the daily charts and was last seen changing hands around 0.7365, down 0.14% on the day. At this point, the 100-day SMA around the 0.7375 region should cap fresh recovery attempts in the AUDUSD pair. On the hourly timeframes, the pair is capped by the descending 20-SMA, suggesting the Australian dollar could stay under pressure in the short term. Should the greenback demand intensify anytime soon, the pair could slip to fresh nearly one-month lows below the 0.7350 area.