The common currency now needs to regain the 20-DMA in order to see a more robust recovery in the short term
The dollar jumped nearly across the board on Monday as US Treasury yields rose, pushing the USD index back above the 96.00 figure. As a result, the euro retreated from local highs to get back below the 1.1300 figure. On Tuesday, EURUSD has settled around this level, struggling to regain the upside momentum. The pair was last seen changing hands in the 1.1305 area, up 0.09% on the day. The common currency now needs to regain the 20-DMA in order to see a more robust recovery in the short term. However, it looks like the prices would lack the upside momentum to get back to the 1.1370-1.1380 region anytime soon as the dollar holds steady after yesterday’s rally. In a wider picture, the greenback is expected to remain bolstered by the Fed’s intentions to hike the interest rates this year.
The pound erases Monday’s losses while still staying below a slightly descending 100-DMA that represents the key barrier for the sterling bulls at this point. It looks like the pair would lack the upside momentum to overcome this hurdle, currently at 1.3555. Of note, the cable last touched this moving average in late October and was rejected from it eventually. On the four-hour charts, GBPUSD was last seen flirting with the 20-SMA while also trying to settle above the 1.3500 figure. Should the upside bias persist anytime soon, the pair could attract some profit-taking as the mentioned moving average will likely deter the bulls once again. On the downside, the immediate support is now expected at 1.3460, followed by the 1.3420 area and the 1.3400 figure.
USDJPY extends the ascent on Tuesday due to a lack of the safe-haven yen demand. The pair rallied to fresh five-year highs in the 115.90 area, targeting the 116.00 figure during the European hours. Of note, the greenback keeps clinging to the upper end of the extended range despite the RSI entering the overbought territory in recent trading. Still, a downside correction could take place in the near term as the 116.00 level could trigger some profit-taking and send the prices back at least to the 115.50 area, followed by the 115.30 support zone. On the shorter-term timeframes, the pair looks overbought as well, suggesting a retreat could be expected soon. In a wider picture, however, the dollar would stay bullish and elevated, preserving the uptrend from the start of 2021.
Gold prices briefly climbed to November 22 highs around $1,831 before plunging on Monday. In the process, the bullion slipped back below the $1,800 psychological level before bouncing marginally today. The XAUUSD pair was last seen changing hands around $1,808, up 0.44% on the day. Of note, the prices managed to hold above the key moving averages during the recent sell-off, suggesting the downside potential could be limited as long as the precious metal stays above these SMAs that arrive in the $1,798-$1,792 region. On the upside, a decisive break above the mentioned multi-week highs in the $1,830 area would pave the way towards the $1,843 next resistance, followed by the $1,860 barrier, standing on the way towards mid-2021 highs seen at $1,877.
USDCHF bounced strongly from nearly two-month lows around the 0.9100 figure to get back to the 0.9200 area where the 20-DMA capped gains on Monday. Today, this moving average continues to act as the nearest resistance, with the pair struggling for direction around the flat-line. It looks like the greenback will struggle to overcome the key SMA in the near term as the USD bulls may need a break after a strong one-day rally. On the downside, the immediate support now arrives at 0.9170 where the 200-DMA lies. On the weekly timeframes, the pair has already erased last week’s losses but is yet to preserve gains as the downside correction could take place in the short term.