The dollar is supported by the market’s cautious sentiment amid thin end-of-year liquidity conditions
The USD index refreshed intraday highs near 96.09, up for the second consecutive day on Friday. The greenback is supported by the market’s cautious sentiment amid thin end-of-year liquidity conditions. As such, EURUSD keeps treading water around the 20-DMA while preserving a bearish bias after a failed attempt to overcome the 1.1370 zone. As long as the prices stay above this moving average, however, the downside potential looks limited in the short term. On the flip side, a dip below 1.1300 would pave the way towards this week’s lows around 1.1270. On the four-hour charts, the pair is now stuck between the key moving averages, with the bearish bias persisting. The immediate target for euro bulls arrives at 1.1330, followed by the mentioned 1.1370 area.
The cable retains a modest bullish bias despite the recent recovery in the USD index. The pair keeps oscillating around mid-November highs in the 1.3520 area, with upside risks persisting as long as the prices stay above the 1.3500 figure that now represents the immediate support. Of note, the daily RSI is pointing north but is yet to enter the overbought territory, suggesting there is some room for further upside in the short term. Should the pound overcome the mentioned highs, the market focus would shift towards the descending 100-DMA, currently at 1.3560. On the hourly timeframes, the cable has settled above the 20-DMA, adding to a more upbeat technical picture that persists as long as GBPUSD stays above 1.3370.
USDJPY peaked at fresh more than one-month highs around 115.20 on Thursday before retreating marginally. Today, the pair struggles for direction, oscillating around the 115.00 figure. The dollar is now within striking distance from multi-year highs in the 115.50 area, but it looks like the pair will struggle to challenge this level in the near term as traders stay cautious in year-end trading. Still, USDJPY is finishing the year on strong footing and could extend the ascent during the first quarter of 2022 due to broad-based strength in the greenback. In the immediate term, the bullish potential will likely be limited by the 115.20 area while on the downside, the nearest support arrives at 114.80.
The BTCUSD pair slumped from this week’s highs around $52,000 on Monday and has been declining since then. Yesterday, the largest cryptocurrency by market capitalization extended losses to ten-year lows just below the $46,000 figure before bouncing above $47,000. However, the bitcoin price jumped in recent trading to get back to the 20-DMA representing the key barrier on the way towards the $50,000 psychological level. The BTCUSD pair was last seen approaching the $48,500 region after yesterday’s brief plunge below $46,000. Despite the recent retreat, the coin is finishing the year with solid gains, adding more than 60% since January. The digital currency jumped to all-time highs around $69,000 in November and has been correcting lower since then.
Gold prices extended gains to five-week highs around the $1,820 zone that capped the upside momentum earlier this week and sent the bullion lower. The XAUUSD pair derived support from the 20- and 100-DMAs that now converge around $1,790 and has been recovering since then. Now, the $1,800 figure represents the immediate support, with upside risks persisting as long as the yellow metal stays above this psychological figure. On the four-hour timeframes, the RSI looks directionless, suggesting further gains could be limited in the near term. In case of a retreat, the prices would target the 20-SMAs currently at $1,808. In a wider picture, gold is set to finish the third bullish week in a row while also staying positive on the monthly charts.