The common currency still looks relatively elevated after strong gains witnessed last week
The dollar climbs along with Treasury bond yields after the data from the US showed the CPI climbed to a new four-decade high. Now, money markets are pricing a 90% probability of a 50 basis points rate hike in March. The USD index is now back around the 96.00 figure after the recent dip. Against this backdrop, EURUSD dipped back below the 1.1400 figure to notch one-week lows around 1.1370 before trimming intraday losses marginally in recent trading. The euro was last seen changing hands around 1.1388, down 0.34% on the day. As traders continue to digest Fed’s hawkishness along with hot inflation numbers, the greenback will likely stay on the offensive in the near term. On the weekly timeframes, the pair is correcting lower from a slightly descending 200-week SMA while also trading back below the 20-SMA. Still, the common currency looks relatively elevated after strong gains witnessed last week.
USDJPY advanced to the area of five-year highs around 116.33 on Thursday before finishing the day just below the 116.00 figure. Today, the pair struggles for direction around this level, clinging to the higher end of the extended trading range. The daily RSI is pointing north, suggesting the dollar could challenge fresh long-term tops in the short term as the Japanese jen stays weak amid a dovish tone by the Bank of Japan in contract with the Fed’s hawkishness. On the hourly timeframes, the pair is holding above the 20-SMA but lacks the momentum to stage another ascent towards the mentioned highs. It looks like the greenback could see a local retreat before attracting renewed demand that would take the prices back to the 116.30-116.35 zone. On the downside, failure to settle above 116.00 will open the way towards the 115.70 initial support, followed by the 115.40 region.
On Thursday, XAUUSD briefly peaked at two week-highs around $1,841 but failed to preserve gains and retreated to finish in the red for the first time in five days. The bullion retains a bearish bias on Friday and was holding just above the 20-DMA (currently at $1,819) earlier in the day. Should this moving average five up anytime soon, the prices will target the next support around $1,815, followed by the $1,800 psychological level. In recent trading, the precious metal erased intraday losses to settle at the flat-line around $1,827 as dollar demand has waned somehow following the recent rally. On the weekly timeframes, the XAUUSD pair looks set to finish in positive territory and could even regain the ascent towards fresh local highs above the $1.840 figure. On the positive side, the metal continues to hold above the key simple moving averages on the weekly charts.
The bitcoin price rallied at the start of the week, extending gains after a recovery above the $40,000 psychological level. The BTCUSD pair had been retaining a bullish bias till Thursday when the prices briefly exceeded the $45,000 figure and notched early-January highs around $45,800. However, the coin failed to preserve gains and retreated aggressively to finish below $44,000. The initial spike in bitcoin price still could be viewed as another bullish sign, suggesting the cryptocurrency market is getting out of its multi-week bearish correction that took bitcoin to mid-2021 lows below the $33,000 figure on January 24. On Friday, the digital currency stays under some pressure. Earlier in the day, the price extended losses to four-day lows around $42,600 before regaining the $43,000 figure, suggesting the downside potential could be limited in the short term. On the weekly timeframes, BTCUSD still looks set to finish in the positive territory if the prices manage to stay afloat during the weekend.