Worsening risk trends may boost dollar demand ahead of the weekend to send the euro back to mid-2020 lows
EURUSD
The dollar finished the day down against most major counterparts to regain some upside impetus on Thursday. EURUSD rallied above the 1.1300 handle and advanced to the 1.1350 region. However, the bulls were deterred by this intermediate barrier that sent the common currency lower again. The pair so far derives support from the 1.1315 area, but it looks like the prices could get back below the 1.1300 figure where the descending 20-DMA arrives. Furthermore, worsening risk trends may boost dollar demand ahead of the weekend to send the euro back to mid-2020 lows seen at 1.1185 in November. In a wider picture, the US currency continues to derive support from the notion that the Fed may speed up tapering next week.
GBPUSD
GBP/USD plunged to a fresh 2021 low of 1.3163 to trim intraday losses to the 1.3200 figure eventually. Today, the cable struggles for direction around this level, and it looks like the pair could see another dip to the mentioned lows in the short term as dollar demand is picking up gradually as the US CP report looms. The daily RSI is now flirting with the 30 figure and is about to enter the oversold territory. In case of a bounce, the pound could target the 1.3260 area first but will likely stay below the descending 20-DMA anyway. As a reminder, this moving average has been capping on the upside since late October, suggesting the pair would need a strong bullish catalyst to challenge this hurdle. On the four-hour charts, bearish signals prevail as well, which implies that the path of least resistance remains to the downside at this point.
USDJPY
USDJPY was once again rejected from the 20-DMA that has been capping gains since the plunge witnessed on November 26. The pair keeps struggling for direction for the third day in a row on Thursday, oscillating around the 113.50 zone. On the downside, the greenback derives support from the 113.30 region. Followed by 113.00. On the hourly charts, the pair managed to hold above the 200-SMA but the RSI is pointing lower now, suggesting the prices could stay below the mentioned 20-day SMA, currently at 113.90. Should this intermediate barrier give up, USDJPY will regain the 114.00 key barrier. However, it looks like the pair would keep clinging to the familiar tight range in the near term before deciding on the further direction.
XAUUSD
After a rejection from the $1,790 area, gold prices finished lower yesterday while regaining a slight bullish bias on Thursday. Further clinging to familiar levels, the bullion is changing hands marginally above the $1,780 figure during the European hours. The precious metal still remains below the $1,800 figure and could keep trading on the defensive amid rising hopes that the Fed will likely accelerate the reduction in bond-buying next week. So far, gold prices are trading unchanged on the weekly charts. Adding to a negative outlook, the metal struggles to overcome the 100- and 200-DMAs in the $1,790-$1,792 region. Should this zone give up, the next barrier would be represented by the $1,800 mentioned psychological level. This figure will likely continue to act as resistance for the gold bulls in the coming days, as downside risks keep persisting at this stage.
AUDUSD
The rally in the AUDUSD pair has stalled after three days of solid gains. The prices advanced to fresh December highs around 0.7185 where the 20-DMA capped gains and triggered a local retreat. As a result, the RSI regained a bearish bias in shorter-term timeframes, suggesting the Aussie will likely need an extra catalyst in order to overcome the mentioned moving average on a daily closing basis. The pair was last seen changing hands around 0.7155, down 0.20% on the day. The immediate support is now expected at 0.7120, followed by the 0.7100 figure. On the upside, a break above the 0.7200 handle would pave the way to further gains. However, it looks like AUDUSD would keep retreating in a technical correction after a rally, especially as dollar demand seems to be reemerging gradually as the Federal Reserve meeting looms.
