The euro could plunge to fresh long-term lows in the coming days
The dollar is back on the offensive across the market ahead of the two-day FOMC policy meeting that concludes on Wednesday. EURUSD failed to hold above the descending 20-DMA and got back under the 1.1300 figure, threatening the 1.1260 intermediate support, a break below which would pave the way towards last week’s lows in the 1.1230 area. The key risk for the common currency is the European Central Bank decision that will stand in stark contrast to the Federal Reserve this week. As such, the pair could dip to fresh long-term lows below 1.1200 in the coming days. The euro was last seen changing hands around 1.1270, down 0.37% on the day. On the upside, the immediate barrier arrives at 1.12190 where the mentioned moving average lies. As long as EURUSD stays below 1.1350, downside risks prevail.
The cable edged higher on Friday to finish the week in positive territory. However, GBPUSD struggles to extend the advance on Monday as dollar demand has reemerged. As such, the pair slipped earlier in the day to meet the intermediate support around 1.3220. At this stage, bearish risks are limited as long as the prices stay above the 1.3200 figure. However, as the daily RSI is pointing slightly lower in neutral territory, it looks like the pound could suffer deeper losses in the short term. Furthermore, the descending 20-day moving average has been capping on the upside since late October, suggesting the pair would need a strong bullish catalyst to challenge this hurdle.
USDJPY bounced from the 113.20 area to stage a solid local rally on Monday. The pair rallied to the 113.70 region while still being capped by the 20-DMA, currently at 113.86. In turn, this moving average represents the intermediate barrier on the way towards the 114.00 figure last seen on November 26 when the dollar plunged from multi-year highs. In the coming days, USDJPY could challenge the mentioned SMA due to a Fed’s hawkish decision. Otherwise, the prices would see a solid retreat from the current levels. Despite the greenback struggles below 114.00, the uptrend remains intact for the time being. On the hourly charts, the technical picture looks mixed, as the prices have settled above the key moving averages while the RSI has reversed south.
Gold prices retain s modest bullish bias on Monday, still struggling to overcome the key moving averages below the $1,800 psychological level. As long as the prices stay below this level, downside risks prevail in the short term. On the downside, the XAUUSD pair needs to hold above the $1,770 area in order to avoid fresh losses. On the weekly timeframes, the yellow metal is yet to overcome a strong resistance represented by the 20- and 100-week SMAs just below $1,800. As such, the bullion will likely need a strong bullish catalyst to challenge this barrier and regain a sustained upside momentum. As dollar bulls continue to dominate the market, it looks like gold prices will continue to struggle below the $1,800 figure this week and could even see a sell-off that would push the metal below the mentioned support zone.
USDCHF rallied on Monday to erase losses incurred ahead of the weekend. The pair, however, has once again encountered a barrier represented by the 20-DMA, currently at 0.9255. On the downside, the 100-DMA around 0.9200 represents the key immediate support. As long as the prices are stuck between the mentioned moving averages, the pair would stay directionless. At the same time, it looks like the path of least resistance is to the upside, as the daily RSI has reversed north, with USD demand prevailing across the market. On the four-hour charts, USDCHF needs to overcome the 0.9250 intermediate barrier in order to retarget this month’s highs in the 0.9275 area, followed by the 0.9300 figure.