As the dollar stays afloat, refraining from a deeper bearish correction, it looks like the pound will stay below the 1.3500 figure at this point
The safe-haven dollar demand has cooled on Monday, so the USD index continues to retreat from fresh long-term highs seen last week. The index is now approaching the 97.00 figure, with downside risks looking limited for the time being as risk aversion could reemerge at any point. EURUSD bounced from mid-2020 lows around 1.1120 to settle in the 1.1180 area on Monday. Despite some weakness surrounding the greenback, the euro struggled to regain the 1.1200 mark, suggesting downside risks continue to persist in the near term. On the hourly charts, the prices have settled just above a slightly ascending 20-SMA but the recovery momentum looks too modest to bet on more robust gains in the immediate term. On the upside, a decisive break above 1.1200 on a daily basis would somehow improve the near-term technical picture.
The cable extends recovery from late December on Monday. The pair regained the 1.3400 figure and advanced to the 1.3450 area that has been capping the upside impetus since the start of the European session. This is a critical zone in the immediate term as a break above it would further ease the selling pressure surrounding the pound and open the way towards the 100-DMA, currently at 1.3516. However, as the dollar stays afloat, refraining from a deeper bearish correction, it looks like the pair will stay below the 1.3500 figure at this point. On the downside, the immediate support arrives at 1.3400, followed by the 1.3385 region, while multi-week lows arrive at 1.3355.
USDJPY briefly peaked at 115.70 on Friday but failed to preserve gains and retreated by the end of the trading week. Today, however, the dollar regained the upside momentum to notch intraday highs around 115.60 before correcting slightly lower during European trading. The technical picture on the daily charts remains upbeat, with the RSI pointing slightly higher in the neutral territory while the prices are holding above the key moving averages. Should the upside pressure persist in the short term, the greenback may challenge the mentioned local highs and thus retarget the 116.00 figure seen earlier this month. However, it looks like this barrier will continue to act as resistance for the time being. On the downside, the nearest support should be expected at 115.20, followed by the 20-DMA, currently at 114.80.
Gold prices are making recovery attempts following a three-day sell-off that took the prices to mid-December lows around $1,780 amid a strong rally in the greenback. On Monday, the XAUUSD pair bounced marginally but failed to regain both the $1,800 figure and the 100-DMA, currently at $1,795. As long as the prices stay below these immediate barriers, downside risks continue to persist. On the hourly timeframes, the yellow metal has settled just above the 20-SMA but the overall technical picture looks unconvincing despite the dominating upside bias in the RSI. Should dollar demand reemerge anytime soon, the bullion will easily get back $1,790 and could even challenge the mentioned lows. In this scenario, the next support should be expected at $1,775, followed by the $1,770 region.
Over the weekend, BTCUSD encountered local resistance represented by the $38,600 zone that pushed the coin back under the selling pressure. The digital currency stays on the defensive on Monday, albeit the bearish momentum looks limited for the time being. On the downside, the immediate support is now represented by daily lows around $36,600. Should this zone withstand the pressure in the near term, a more decisive bounce could be expected. However, the broader upside potential remains limited as long as the prices stay below the $40,000 psychological figure and the descending 20-DMA, currently at $39,300.