Demand for the greenback could reemerge at any point
The dollar advanced early in Asia to give up intraday gains during the European hours on Tuesday. As such, the euro bounced from the 1.1265 support zone and turned positive on the day. The pair is now back above the 1.1300 figure and the 20-DMA while still staying below the 1.1320 area that represents the immediate barrier for the common currency. Despite the latest recovery, the euro remains vulnerable to fresh losses ahead of the FOMC policy decision due on Wednesday. In a wider picture, the outlook remains bearish as well, with EURUSD trading just above long-term lows seen last month below the 1.1200 figure. In other words, the prices could get back below 1.1300 in the short term and will likely stay on the defensive in the coming days.
Similarly, the pound erased yesterday’s losses in recent trading and was last seen struggling below the 1.3240 region. The pair also holds below the 1.3270 area that capped gains at the start of the week. As dollar demand could reemerge at any point, the current recovery looks indecisive and fragile, with downside risks persisting for the time being. Should the prices get back below the 1.3200 figure, last week’s lows around 1.3160 would come back into the market focus. On the four-hour charts, however, the technical picture has improved somehow as the prices regained the 20-SMA while the RSI is pointing slightly higher. Still, the overall picture remains downbeat as long as the cable stays below the descending 20-DMA, currently at 1.3310.
USDJPY has been struggling to overcome the 20-DMA since last week and was once again rejected from this moving average on Tuesday. As such, early gains were capped by the 113.75 area, and the pair has settled just above the flat-line since then. Despite failed bullish attempts, the dollar looks steady above the 113.20 area that has been acting as strong support these days. Should the greenback receive an impetus in the coming days, the mentioned 20-day SMA would turn into support for the first time since the plunge witnessed on November 26. On the downside, the bearish potential is limited as long as the prices stay above the 113.00 figure while the key support arrives at 112.50.
The bitcoin price licks its wound just above the 200-DMA after yesterday’s plunge to ten-day lows around $45,600. At the start of the week, the largest cryptocurrency by market capitalization was rejected from the $50,000 psychological level to attract sellers on bullish attempts. Despite a modest bullish bias on intraday charts on Tuesday, the BTCUSD pair looks vulnerable to fresh losses, especially as the prices stay below the mentioned crucial barrier. It looks like the market could need a strong bullish catalyst in order to get back above $50,000 and retarget the 100-DMA, currently at $54,500. On the hourly timeframes, the coin is now back above the 20-DMA but the directionless RSI suggests bitcoin would stay on the defensive in the near term.
The Kiwi plunged to the lowest level since November 2020 earlier on Tuesday before bouncing marginally. After a dip to the 0.6735 area, the pair recovered to 0.6760 and was last seen holding off intraday highs registered around 0.6775 earlier in the day. On Monday, the New Zealand dollar was rejected from the 0.6800 figure that represents the immediate resistance and could keep limiting gains in the short term. Furthermore, the pair may revisit the mentioned November 2020 lows and plunge further as the dollar remains on the offensive despite the recent local retreat. Of note, the daily RSI is flirting with the 30 figure, adding to a downbeat technical picture.