Should the figures come in better than expected, the greenback will stage widespread recovery
The dollar extended the decline after a hawkish twist from the ECB, pushing the euro above the 1.1400 figure. EURUSD extended the ascent to the 1.1470 region on Friday, now targeting the 1.1500 figure. Later in the day, the US NFP employment report will set the tone for USD pairs ahead of the weekend. Should the figures come in better than expected, the greenback will stage widespread recovery, thus capping the bullish momentum surrounding the common currency. The immediate barrier for the euro arrives in the 1.1480 area that triggered a downside correction last month. On the four-hour charts, the RSI has settled in the overbought territory and turned directionless, suggesting the pair could struggle to extend the rally in the immediate term. On the downside, the immediate support now arrives at 1.1430 where the descending 200-DMA lies.
The cable turned lower on Friday after five days of gains in a row. The pair peaked just below the 1.3630 region yesterday before correcting lower. Today, the pound slipped below 1.3600 and was last seen challenging the 20-DMA, currently at 1.3565. Should this moving average give up anytime soon, the prices will target the 100-DMA that arrives at the 1.3500 figure. As long as the pair stays above this level, the downside potential remains limited while bullish risks persist. On the weekly timeframes, the pound remains upbeat while holding above a slightly descending 20-week SMA and staying afloat after bouncing from the levels just above the key 100-week SMA last month. In the immediate term, GBPUSD could retarget the 1.3500 zone if dollar demand picks up ahead of the weekend.
USDJPY retains a bullish bias after yesterday’s recovery above the 20-DMA. The pair is now back above the 115.00 figure, adding 0.13% on the day. However, the recovery looks fragile for the time being, with bearish risks persisting. A daily and weekly close above 115.20 would somehow improve the short-term technical picture, however. On the downside, should the 114.80 intermediate support give up, the dollar bears will reenter the game to take the prices back below the mentioned 20-DMA, currently at 114.55. On the hourly charts, the RSI is reversing lower around the overbought levels, suggesting further gains could be limited in the immediate term. In a wider picture, however, the greenback stays within a broader uptrend while also holding above the ascending 20-week SMA since September. On the upside, the key target for USD bulls arrives in the 115.70 zone that representing significant resistance on the way towards the 116.00 figure last seen nearly one month ago.
The precious metal briefly dipped below the $1.790 area before regaining the $1,800 figure on a daily closing basis. Today, the XAUUSD pair regained the upside bias, holding just shy of this week’s highs seen around $1,810 during the European hours. However, the bullion could get back under selling pressure if the dollar stages a reversal later in the day. In this scenario, the yellow metal would finish the trading week below $1,800. At the same time, the prices need to stay above $1.790 in order to finish in positive territory. On the upside, a decisive break above the mentioned highs would pave the way towards the 20-DMA, currently at $1,817. However, it looks like the path of least resistance is to the downside at this point. In shorter-term timeframes, the technical picture looks neutral, with prices being stuck between the key moving averages.