Should the greenback extend the bounce, the euro may retarget the 1.1275 region, followed by the 1.1250 zone
The dollar weakened nearly across the market during the US trading on Wednesday despite the elevated Treasury yields. Following the sell-off, however, the USD index turned back positive on Thursday to get back above the 96.00 figure and was last seen changing hands around 96.18, up 0.26% on the day. EURUSD briefly jumped to early-December highs in the 1.1370 area before retreating marginally. On Thursday, the euro came back under the selling pressure to erase yesterday’s gains. The pair slipped to the 1.1300 figure where the 20-DMA arrives. Should the greenback extend the bounce, the euro may retarget the 1.1275 region, followed by the 1.1250 zone. On the upside, the immediate target now arrives at 1.1330.
The cable briefly derailed the 1.3500 figure for the first time since November 19 at the start of the day but failed to preserve the upside momentum and retreated back into the negative territory. GBPUSD slipped to the 1.3460 area during the European hours, trading 0.20% lower on the day. Rejection from the mentioned psychological level suggests the pound would need an extra catalyst in order to make a decisive break above this barrier. It looks like the pair will struggle to resume the ascent in the near term as the dollar is back on the offensive after a short-lived sell-off witnessed on Wednesday. On the four-hour timeframes, the prices are approaching the 20-SMA while the RSI continues to correct lower from the overbought territory, which implies that the cable could stay under pressure in the immediate term.
USDJPY derailed the 115.00 figure on Wednesday to extend the ascent today. The pair advanced to fresh more than one-month highs around 115.20 and was last seen clinging to the upper end of the extended trading range. Should the greenback preserve the upside impetus in the near term, the pair may target multi-year highs seen in the 115.50 area last month. On the downside, the 115.00 figure now represents the immediate support, followed by the 114.70 region and 114.40. In a wider picture, USDJPY is finishing the fourth bullish week in a row, with the weekly RSI flirting with the overbought levels, suggesting the upside could be limited from here. In the immediate term, the prices need to hold above 115.00 in order to preserve gains and stay close to the mentioned highs.
USDCHF briefly plunged to November 11 lows around 0.9125 on Wednesday to finish the day slightly off the lower end of the range, around 0.9140. Today, the pair regained the upside momentum and bounced back to the 0.9180 region, trading up 0.37% on the day. As such, the dollar has settled above the 200-DMA bot is yet to confirm recovery above this moving average, currently at 0.9170. Should the prices manage to hold above this level during the European hours, the greenback could retarget yesterday’s peaks at 0.9200. However, it looks like USDCHF would fail to make a decisive break above this local barrier anytime soon. Furthermore, should profit-taking reemerge, the pair may slip back to 0.9155 or lower.
The Aussie has been trending marginally higher these days but still lacks the upside momentum to challenge the 100-DMA, currently at 0.7290, last seen in mid-November. Earlier this month, the pair bounced from the 20-DMA and has been trending north since then. However, it looks like the upside could be limited from here due to a generally strong dollar and this trading conditions at the end of the year. On the hourly charts, the pair could get back under the ascending 20-SMA as the RSI lacks upside momentum, pointing to a neutral technical picture at this point. On the downside, the immediate support arrives at 0.7250 where the mentioned moving average lies.