The path of least resistance for the euro remains to the downside while the dollar looks set for further gains
The euro stays pressured by a stronger dollar on Tuesday. Earlier in the day, recovery attempts were capped by the 1.1385 area to push the euro back to the flat-line during the European hours despite risk sentiment having improved somehow across the markets. It looks like the common currency could challenge mid-2020 lows seen around 1.1355 to target the 1.1300 figure next. On the upside, the pair needs to make a decisive break above the 1.1400 level in order to come off long-term lows and stage a recovery eventually. However, the path of least resistance for the euro remains to the downside while the dollar looks set for further gains both in the short- and medium-term.
The cable resumed the recovery on Tuesday despite the resilient USD index. The pair advanced to nearly one-week highs around 1.3470, coming off 2021 lows seen in the 1.3350 area late last week. Now, the pound needs to regain the 1.3500 figure on a daily closing basis in order to extend the rebound in the coming days. However, it looks like the upside potential would be limited in the short term, with bearish risks persisting as long as the prices stay below the descending 20-DMA that arrives just above the 1.3600 mark. On the four-hour timeframes, however, the technical picture has improved somehow after the pair got back above the 20-SMA while the RSI reversed north in recent trading.
USDJPY climbed to early-November highs around 114.30 earlier in the day before retreating marginally. The pair was changing hands above the 114.00 figure during the European hours, looking resilient while also trading above the 20-day SMA, today at 113.80. As long as the greenback stays above this level, downside risks are limited. On the upside, USDJPY may need an extra catalyst to overcome the mentioned highs, followed by the 114.45 intermediate barrier on the way towards nearly one-month tops around 114.70. On the weekly charts, the RSI is about to enter the overbought territory, suggesting the bullish potential could be limited from here, at least without a solid catalyst that would push the greenback higher across the board.
Gold prices are back on the offensive following a short-lived bearish correction witnessed on Monday. The XAUUSD pair climbed to fresh five-month highs around $1,875 and was last seen clinging to the upper end of the extended range. Should this significant barrier give up anytime soon, the precious metal may target the $1,890 area, followed by the $1,900 psychological level last seen in early June. However, if the prices manage to advance to this hurdle, a downside correction could be expected eventually as traders may opt to take some profit at attractive levels. In a wider picture, it looks like there is room for further gains due to rising inflation worries across the globe. On the downside, the immediate support now arrives at $1,855.
USDCHF has been rallying for the fifth session in a row on Tuesday. The pair extended gains to one-month highs around 0.9277 before retreating marginally in recent trading. The daily RSI is pointing north but is yet to enter the overbought conditions, suggesting there is room for further gains in the short term. Should the mentioned highs give up, the 0.9300 figure will come into the market focus. Furthermore, the dollar is flirting with the descending 100-week SMA for the first time since last month. A decisive break above this moving average on a weekly closing basis wound add to bullishness surrounding the pair. The immediate support is now represented by the 0.9250 area, followed by 0.9210.