The euro may extend losses to the 1.1360 area that could act as support and trigger a bounce eventually
The dollar remains on the offensive across the market on Friday as the 10-year US Treasury bond yield extends the ascent triggered by stronger-than-expected inflation figures earlier this week. As such, EURUSD dipped to fresh mid-2020 lows around 1.1435 and was last seen clinging to the lower end of the extended trading range. It looks like the pair could derail the 1.1400 figure in the short term amid the persistent buying pressure surrounding the greenback despite some improvement in risk sentiment ahead of the weekend. Should the mentioned psychological level give up anytime soon, the pair may extend losses to the 1.1360 area that could act as support and trigger a bounce amid the oversold conditions. The medium-term outlook now looks bearish as well.
The cable refreshed late-2020 lows earlier in the day before bouncing slightly into positive territory in recent trading. The pair encountered support in the 1.3350 area and briefly exceeded the 1.3400 figure. However, the pound failed to hold above this level during the European hours, suggesting the upside potential remains limited at this point, with bearish risks persisting. GBPUSD is finishing the third bearish week in a row, distancing further from a slightly descending 20-week SMA. On the hourly charts, the prices have settled above the 20-DMA, but a bearish bias in the RSI suggests the pound could come back under the selling pressure in the near term. A daily close below the 1.3400 handle would be a confirmation of the further deterioration in the short-term technical picture.
USDJPY rallied strongly on Wednesday and has been elevated since then. The pair bounced off local lows below 113.00 and extended the recovery to 114.30 earlier today. The dollar has retreated since then, however, to settle around the 114.00 figure during the European hours. It looks like USDJPY could struggle to see fresh gains in the short term as dollar bulls are getting more cautious ahead of the weekend. On the other hand, the downside potential looks limited as well, especially as risk sentiment has improved on Friday, easing demand for the safe-haven Japanese yen. On the four-hour timeframes, the RSI is pointing south, suggesting the pair could get below 114.00 on a daily closing basis.
The Kiwi has been losing ground for the fourth day in a row already. The pair briefly derailed the 0.7000 psychological level for the first time in a month before trimming intraday losses in recent trading. Since then, the New Zealand dollar has settled around 0.7015, flirting with the 100-DMA. On the negative side, the pair looks set to finish the week below the 20-week SMA. As this moving average is turning back into resistance, it looks like the path of least resistance remains to the downside at this point. Should the selling pressure persist, NZDUSD may target the 0.6980 region next. On the upside, the immediate resistance now arrives at 0.7030, followed by the 0.7055 zone while the key target is represented by the 200-DMA that arrives just below the 0.7100 level.
USDCAD keeps recovering from June lows seen below the 1.2300 figure one month ago. The pair has been rallying for the third day in a row on Friday. The prices extended gains to early-October highs just above the 1.2600 figure and were last seen flirting with this immediate barrier. Should the dollar fail to overcome this hurdle on a daily closing basis, a short-term downside correction could be expected. However, the overall technical picture remains buoyed as long as the prices stay above the ascending 20-DMA, today at 1.2410. On the downside, the nearest support arrives at 1.2570. followed by the 100-DMA that lies around 1.2540. A daily and weekly close above the 1.2600 would pave the way towards the 1.2640 region.
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