It looks like GBPUSD could extend the decline towards the 1.3400 figure before reversing north
The dollar is mostly up, with U.S. equity futures rebounding on Monday after Asian stocks came off early lows to turn mixed eventually. Still, the USD index continues to struggle below 96.00 despite the Fed’s looming meeting, suggesting market participants are still divided over FOMC. The euro is back under pressure on Monday, with the 20-DMA capping gains in the near term. On the downside, the 1.1300 figure remains in the market focus as a decisive break below this level would pave the way towards this year’s lows around 1.1270. The EURUSD pair was last seen changing hands around 1.1325, down 0.12% on the day. The euro will likely struggle to get back above the mentioned moving average anytime soon, with the daily RSI pointing south in the neutral territory.
The cable retains a modest bearish bias on Monday, flirting with the 100-DMA during the European hours. Should the pressure persist, the pair may derail the 1.3530 zone to retarget the 1.3500 figure for the first time in 2.5 weeks. As such, as long as the pound stays above this area, downside risks look limited. On the hourly timeframes, the technical picture looks bearish, with the RSI pointing south while entering the oversold territory while the prices stay pressured by the descending 20-SMA, currently at 1.3553. In a wider picture, it looks like GBPUSD could extend the decline towards the 1.3400 figure before reversing north. However, should the Fed fuel a sustained rally in the greenback, the pair may see deeper losses this week.
USDJPY has been retreating for the fifth day in a row on Monday, as the prevailing risk-off tone in the global financial markets fueling the safe-haven yen demand. The pair extended losses to mid-January lows around 113.50 earlier today and was last seen clinging to the lower end of the extended range, suggesting the dollar would stay on the defensive in the near term. On the upside, the immediate target now arrives at 113.70, followed by the 114.00 figure while last week’s lows are seen around 115.00. The pair needs to regain this barrier in order to target long-term tops seen in the 116.35 area earlier in January. Should the pair extend the decline, the ascending 100-DMA, currently at 113.25, could act as support. Should the dollar stage bounce from this zone, the prices may jump back above the 114.00 level in the short term.
The bitcoin price plunged to six-month lows around $34,000 last week and was last seen clinging to the lower end of the extended trading range at the start of the week as sellers remain in control. Earlier on Monday, the BTCUSD pair was rejected from the $36,500 area, suggesting the recovery potential is limited at this point despite the oversold conditions. Should the pressure keep intensifying in the short term, the coin could target the $30,000 critical figure. The digital currency was last seen changing hands around $35,000, nearly unchanged on the day. On the four-hour timeframes, the prices have been capped by the descending 20-SMA since January 21 while the RSI is flirting with the 30 figure, approaching the oversold territory. Should the prices fail to settle above the $36,000 level anytime soon, BTC could keep losing ground towards fresh multi-month lows.
Gold prices have already erased Friday’s losses to exceed the $1,840 figure. The XAUUSD pair advanced to two-month highs around $1,847 last week before correcting lower amid profit-taking ahead of the weekend. The resurgent demand for the safe-haven metal suggests the short-term outlook for the bullion stays relatively upbeat at this point. As long as the prices keep trading above the $1,830 zone, the path of least resistance is to the upside. However, gold prices could come under renewed pressure in the coming days should the dollar rally in the aftermath of the upcoming Fed meeting. In this scenario, the XAUUSD pair will derail the $1,830 zone, thus shifting the market focus back to the ascending 20-DMA, currently at $1,817