The greenback may derive some support from the US CPI report if the figures confirm the continuing rise in inflation
As risk sentiment has improved, the safe-haven dollar slipped nearly across the board after Powell’s speech. The USD index failed to regain the 96.00 figure and slipped back to the 95.60 area that capped losses last week. Against this backdrop, EURUSD rallied to the 1.1380 area on Wednesday before retreating back to the flat-line. Now that the common currency has settled above both the 1.1300 figure and the 20-DMA, it looks like the pair could extend the ascent in the near term. However, later in the day, the greenback may derive some support from the US CPI report if the figures confirm the continuing rise in inflation. In this scenario, the euro will target the 1.1330-1.1320 region, followed by the mentioned 1.1300 psychological support.
Earlier on Wednesday, the cable extended gains to early-November highs around 1.3645 before retreating marginally in recent trading. At the start of the week, the pair exceeded the 100-DMA and derailed the 1.3600 figure for the first time in two months. As a result, the daily RSI has approached the overbought territory, suggesting the pound could proceed to a bearish correction in the short term should the dollar index shrug off the recent weakness and bounce back above the 96.00 figure. On the hourly charts, the technical picture has deteriorated already, with the pair trading below the 20-SMA while the RSI is pointing south, suggesting the prices may slip back below 1.3600 in the near term. In a wider picture, however, the uptrend remains intact so far.
USDJPY extends recovery from the 115.00 figure that acted as support at the start of the week. Today, the dollar advanced to 115.45, holding off Tuesday’s highs registered around 115.70. Despite the pair regaining a bullish bias, it looks like the upside potential is limited at this point, and the 116.00 level could continue to act as resistance for the time being. However, in a wider picture, the greenback suffers a correction within a broader bullish trend that persists since the start of last year. On the downside, the immediate significant support arrives at 115.00, followed by the ascending 20-DMA, currently at 115.85. The pair registered fresh five-year highs in the 116.35 area last week.
Gold prices jumped to the $1,823 area on Tuesday as dollar demand waned, pushing the commodity to one-week highs. Today, the precious metal seems to be losing the upside momentum but still holds above $1,810 during the European hours. Should the greenback regain the upside bias, the XAUUSD pair may retarget the $1,800 psychological level in the near term. On the upside, the key barrier arrives at $1,830. This area capped gains last month, so the bullion may need a solid bullish driver to overcome this hurdle in the days or weeks ahead. On the four-hour charts, the upside momentum seems to be waning, with the RSI being directionless in the neutral territory, suggesting the XAUUSD pair could struggle to get back to the mentioned highs anytime soon.
Earlier in the week, the bitcoin price has derailed the $40,000 psychological figure for the first time since September before bouncing marginally. In the recovery process, the largest cryptocurrency by market capitalization challenged the $43,000 level but failed to get back above this hurdle and retreated partially. Today, the BTCUSD pair has settled just below this level, with the upside bias looking too modest to bet on more solid gains in the near term while bearish risks continue to persist. On the other hand, the fact that the coin managed to attract demand below $40,000 suggests traders are not ready to push the prices significantly lower from the current levels. Anyway, bearish risks continue to persist as long as the digital currency stays below a slightly descending 20-DMA that arrives marginally below the $46,000 figure at this point.