The greenback retains a solid bullish bias after a widespread rally seen on Wednesday
The dollar rallied across the board after the US inflation report surprised on the upside. The CPI jumped 6.2% year-on-year last month, the fastest gain since December 1990. As such, the euro derailed the 1.1500 region for the first time since mid-2020 and extended losses to the 1.1450 area earlier on Thursday. EURUSD was last seen changing hands around 1.1465, down 0.12% on the day. Despite the sell-off, the common currency is yet to enter the oversold territory, suggesting there is room for further losses in the short term. Should the pressure persist, the euro would target the 1.1400 handle next. On the upside, the immediate target now arrives at 1.1500, followed by the 1.550 intermediate resistance on the wat towards the 20-DMA, today at 1.1590.
GBPUSD briefly plunged to late-2020 lows earlier on Thursday before erasing intraday losses during the European hours. The pair dipped to 1.3363, but managed to stage a bounce and climbed back to the 1.3400 area. Despite the recent recovery, the technical picture remains bearish in general, with downside risks persisting as long as the prices stay below the descending 20-DMA, today at 1.3660. In the immediate term, GBPUSD needs to settle above 1.3400 in order to avoid deeper losses and regain the 1.3465 intermediate barrier on the way towards 1.3500. On the four-hour timeframes, the technical outlook looks mixed, as the RSI is flirting with oversold levels while the prices seem to be stabilizing off the mentioned long-term lows.
USDJPY saw a strong bounce from local lows on Wednesday due to a widespread rally surrounding the greenback. Today, the pair has settled around the 114.00 figure, above the 20-DMA that has turned into support again. However, the pair is yet to confirm the latest breakout on a daily closing basis even as the bullish RSI points to further gains in the near term. On the hourly charts, USDJPY is holding above the key moving averages while the RSI is correcting slightly from the 70 figure, suggesting the pair could struggle to see another rally later today. Should a bearish correction take place, the prices would target the mentioned 20-day SMA (today at 113.85) first, followed by the 113.50 region.
Despite the surging dollar, gold prices jumped on Wednesday to briefly touch five-month highs around $1,870. The XAUUSD pair has settled above the $1,860 region in recent trading, retaining a solid bullish bias on Thursday. The bullion has been advancing north for the sixth session in a row already, with the daily RSI is flirting with the 70 figure, which implies that the prices could see a local retreat on fresh bullish attempts. Should the buying pressure persist in the short term, the pair may target fresh multi-month highs around $1,880. However, it looks like gains will be capped by this area. On the weekly timeframes, the technical picture keeps improving as well, with the yellow metal looking set to finish the week with the largest gains since May.
USDCHF exceeded the 100-DMA earlier on Thursday, extending gains from yesterday. The pair climbed to the 0.9211 area for the first time this month and was last seen holding around 0.9200. A daily close above this level would pave the way for further gains in the short term while the inability to confirm the breakout could lead to a local downside correction. In this scenario, the dollar may get back under 0.9150. At this point, it looks like the path of least resistance is to the upside, with the daily RSI pointing north in neutral territory. If the prices exceed the mentioned highs, the next bullish target should be expected at 0.9230.