The dollar stays elevated despite some improvement in risk sentiment during the European hours
The safe-haven dollar stays elevated after a rally seen on Monday amid widespread risk aversion. EURUSD derailed the 1.1300 figure and failed to refrain from a deeper retreat. The pair was last seen clinging to two-week lows seen around 1.1285. Should this intermediate support give up anytime soon, the prices will target the 1.1250 zone last seen in December. On the four-hour timeframes, the technical picture keeps deteriorating, with the RSI moving towards the oversold territory while the prices have settled below the key moving averages. It looks like the common currency could see fresh losses in the coming days if tensions over Ukraine continue to rise and the Fed delivers a more hawkish tone than expected.
The cable briefly dipped to early-January lows around 1.3440 before trimming intraday losses to 1.3480 on Monday. Today, the pair struggles for direction as the dollar stays elevated despite some improvement in risk sentiment during the European hours. Should the prices stay below the 1.3500 region in the short term, the pound may see another local sell-off that would take it to fresh local lows. In this scenario, the market focus would shift towards the 1.3400 figure next. On the upside, the immediate resistance now arrives at 1.3500, followed by the 1.3530 area where the 100-DMA lies. Then, the focus would shift towards the 20-DMA, currently at 1.3570.
USDJPY plunged to more than one-month lows just below the 113.50 area on Monday. The pair trimmed intraday losses afterward but stayed below 114.00 as the safe-haven demand supported the Japanese yen. Today, however, the prices retain the bullish bias, holding marginally above the 114.00 figure, suggesting the recovery could continue if the greenback exceeds the 114.15 zone in the short term. On the other hand, as risk trends remain unstable, demand for safe-havens could reemerge at any point, suggesting traders would be cautious during the North American trading later today. In other words, the upside potential for USDJPY looks limited for the time being while bearish risks persist as long as the prices stay below the 114.30 region.
Amid a widespread sell-off that hit global markets yesterday, the bitcoin price plunged to mid-2021 lows around $32,900 before bouncing above $36,000 as dip buyers entered the game after the coin derailed the $33,000 figure. The BTCUSD notched local highs in the $37,500 area to finish the day around $36,700. On Tuesday, the price came under renewed downside pressure, trying to hold above the $36,000 figure. BTCUSD needs to cling to $36,000 in order to avoid deeper losses in the near term. On the upside, a decisive recovery above the mentioned local highs would pave the way towards the $40,000 psychological level strengthened by the descending 20-DMA. However, it looks like the path of least resistance remains to the downside for the time being.
USDCHF rallied strongly on Tuesday, exceeding the 0.9160 area where the 20- and 200-DMAs converge. The pair extended the ascent to the 0.9200 figure and was last seen clinging to the upper end of the extended trading range. This level is followed by the 100-DMA, currently at 0.9212. A decisive break above this moving average would add to a more upbeat technical picture after the recent bounce from early-November lows just below the 0.9100 figure. On the hourly charts, the dollar looks overbought already, suggesting the upside momentum could wane in the short term. On the downside, the nearest support is now expected at 0.9180, followed by the mentioned 20- and 200-DMAs. In a wider picture, USDCHF is now facing solid resistance represented by the 20-week SMA, which implies that a downside correction could take place at the current levels.