Despite today’s recovery, the euro looks vulnerable to further losses at this point
The dollar resumed the downside on the last trading day of the week despite safe-haven flows continuing to dominate the financial markets. The greenback remains sidelined in the 95.60 area, coming under some downside pressure after another failed attempt to break above the 95.80 region. As such, EURUSD bounced back above the 1.1300 figure and was flirting with the 20-DMA during early European hours. Despite today’s recovery, the euro looks vulnerable to further losses at this point. The pair was last seen changing hands around 1.1340, slightly off intraday highs. On the hourly charts, the euro is now back above the 20-DMA while the RSI is pointing north. However, downside risks persist as long as the prices stay below the 1.1370 region on a daily closing basis.
The cable slipped to more than one-week lows around 1.3555, extending the retreat from local highs on Friday despite the retreating dollar. The pair was last seen clinging to the lower end of the extended intraday range, flirting with the 20-DMA during the European hours. Should this moving average give up anytime soon, the pound will retarget the 100-DMA, currently at 1.3540. In a wider picture, GBPUSD is approaching the 20-week SMA, currently at 1.3690. As long as the cable stays above this zone, bearish risks are limited. On the four-hour timeframes, the technical picture has deteriorated, with the RSI is targeting the oversold territory while the prices have settled below the key moving averages, suggesting the path of least resistance in the immediate term is to the downside.
USDJPY has been losing ground for the fourth day in a row on Friday, struggling to regain the upside bias since its rejection from the 115.00 barrier earlier in the day. Ahead of the weekend, the greenback dipped to one-week lows around 113.60 before bouncing partially and was last seen trading just below the 114.00 figure that has turned back into the immediate resistance. However, it looks like the downside potential could be limited as the pair is approaching the 20-week SMA (currently at 113.50) that could act as support zone and trigger a bounce eventually. In this scenario, the pair will regain the bullish momentum to get back to multi-year highs seen at 116.35 earlier this month. Also, USDJPY remains within a broader uptrend despite the recent sell-off.
BTCUSD keeps losing ground on Friday after another failed attempt to overcome the descending 20-DMA yesterday. The largest cryptocurrency by market capitalization derailed the $40,000 psychological figure and plunged to early-August lows around $38,200. The prices bounced slightly in recent trading but were still trading below the $39,000 region that now represents the immediate upside barrier. The fact that the coin has broken below $40,000 for the first time in nearly two weeks suggests the digital currency could see deeper losses in the days to come before finding a bottom. Should the pressure persist, BTCUSD would target the $37,000 figure next. On the upside, a strong bounce above $40,000 would somehow improve the short-term technical picture.