Currencies are clinging to tightening ranges in thinner pre-holiday trading
The dollar looks steady around mid-2020 highs, with major pairs clinging to tightening ranges in thinner pre-holiday trading. EURUSD keeps flirting with the 20-DMA, struggling to regain the 1.1300 figure since the start of the week. The pair was last seen changing hands around 1.1280, just around the flat-line, with the current technical picture looking neutral for as long as the common currency stays in the 1.1230-1.1300 range. On the four-hour charts, EURUSD struggles to overcome the 20-SMA, suggesting the upside potential surrounding the euro remains limited while bearish risks continue to persist at this point. Later today, the pair could come under pressure should the US GDP data exceed expectations and trigger a rally in the greenback.
The cable extends its recovery from 2021 lows seen around the 1.3170 area last week. On Wednesday, the pair extended gains to the 1.3320 area and was last seen clinging to the upper end of the trading range. However, it looks like the pound could face resistance represented by the 1.3340 level as the dollar remains strong and steady in general, especially as risk sentiment in the global financial markets remains unstable. Of note, the pair is now challenging the 100-week SMA that could cap further gains. In the short term, GBPUSD needs to hold above the 20-DMA, currently at 1.3260, on a daily closing basis. Otherwise, the prices could get back below the 1.3240 region and see deeper losses before the end of a shortened trading week.
USDJPY rallied on Tuesday, extending gains today, with the pair flirting with one-month highs around 114.30. The short-term technical picture has improved further after a recovery above the 114.00 figure. Now, the dollar may target the 114.85 zone if the mentioned highs give up anytime soon. Should the prices proceed to a downside correction, however, the pair could threaten the 20-DMA, currently at 113.60. On the four-hour timeframes, the RSI is about to enter the overbought territory, suggesting the greenback may erase a part of recent gains in the near term. In a wider picture, the pair remains slightly off long-term highs registered around 115.50 one month ago.
USDCHF has been retaining a bullish bias for the second day in a row on Wednesday, struggling to overcome the 0.9250 region since last week. It looks like the dollar would need an extra catalyst in order to overcome this strong barrier in the short term. USDCHF was last seen trading at 0.9240, up 0.2% on the day. On the downside, the immediate support now arrives at 0.9225 where the 20-DMA lies. as long as the pair stays above this moving average, the downside potential is limited. On the weekly charts, the dollar stays positive since the beginning of December but still struggles to hold above the descending 100-week SMA. Should the greenback receive a fresh boost in the near term, the pair may make another bullish attempt at 0.9250.
USDCAD rallied to more than one-year highs at the start of the week and has been losing ground since then. On Wednesday, the pair extended the downside correction to the 1.2900 figure, a break below which would pave the way towards this week’s lows in the 1.2875 area, followed by the 1.2860 zone. For the time being, the bearish pressure looks limited, so if 1.2900 withstands the pressure in the short term, the dollar could regain the upside bias in the coming days. Of note, the 100-week SMA arrives at the mentioned long-term highs, suggesting the pair could struggle to make a decisive break above this solid resistance. On the four-hour timeframes, the technical picture looks neutral, with the RSI directionless around 55.