Risk sentiment keeps deteriorating, somehow capping the downside pressure surrounding the safe-haven dollar
The dollar has been on the defensive for the fourth day in a row on Friday. The USD index dipped to the 94.60 area for the first time in two months before bouncing slightly in recent trading as risk sentiment keeps deteriorating, somehow capping the downside pressure surrounding the greenback. Against this backdrop, EURUSD notched fresh two-month highs in the 1.1480 area and retreated to the 1.1460 zone in recent trading. It looks like traders were deterred by the 1.1500 psychological barrier, followed by the descending 100-DMA. The last time the pair traded around this moving average was in mid-2021, so a decisive break above it would be a strong bullish signal from the technical point of view. In the medium term, the buck will likely regain ground due to the Fed’s hawkishness.
The cable has been retaining a bullish bias since Monday, extending gains beyond the 200-DMA that was derailed for the first time since mid-September. Still, after peaking around 1.3750 on Thursday, the pound seems to be losing the upside steam, treading water below the mentioned moving average during the European hours on Friday. On the downside, the immediate support now arrives at 1.3700, followed by the 1.3660 area. Of note, the daily RSI has already entered the overbought territory, suggesting a bearish correction could be expected in the near term. On the weekly timeframes, the pound has been rising for the fourth week in a row, accelerating the bullish momentum following a decisive break above the 20-week SMA, currently at 1.3555.
USDJPY keeps bleeding since the start of the month, retreating further from five-year highs. The pair extended losses to December 21 lows around 113.60 earlier on Friday before correcting marginally in recent trading. The dollar was last seen changing hands just below the 114.00 figure, still down 0.22% on the day. Should the selling pressure intensify anytime soon, the prices would target the 113.30 area while a break below 113.10 could bring even deeper losses in the coming days. However, it looks like the greenback will stage a bounce from the oversold territory in the near term. On the hourly charts, the prices were last seen trending towards the descending 20-SMA, pointing to some improvement in the immediate technical outlook. In a wider picture, USDJPY remains within a broader uptrend, correcting marginally from the five-year highs seen last week.
BTCUSD encountered resistance around $44,500 on Thursday and came back under pressure as the coin lacked the momentum to overcome this immediate barrier. Today, the BTCUSD pair has settled below the $43,000 figure, struggling for direction after another local sell-off. It looks like the largest cryptocurrency by market capitalization will stay vulnerable to deeper losses as long as the prices hold below the $50,000 psychological level. On the downside, the immediate support arrives at $41,500, followed by nearly four-month lows seen just below the $40,000 figure at the start of the week. In a wider picture, bitcoin could finish the week slightly higher if the prices manage to hold above the $41,700 area during the weekend.
USDCHF plunged to early-November lows around 0.9000 before bouncing to the 0.9100 area in recent trading, suggesting the pair could stage a broader recovery from the technical support. During this week’s sell-off, the dollar has got back below the key moving averages while the RSI hasn’t entered the oversold territory to turn directionless today, pointing to a mixed short-term technical picture. Should the downside pressure ease further, the pair could target the 0.9140 zone, followed by the 200-DMA around 0.9160. On the four-hour timeframes, USDCHF seems to be steadying as well, suggesting the downside potential could be limited at this point.