USD bulls were inspired by Biden’s decision to nominate Powell for a second term as Fed chair
The dollar consolidates yesterday’s rally, continuing to outperform its major rivals following Biden’s decision to nominate Powell for a second term as Fed chair. Earlier in the day, EURUSD dipped to fresh long-term lows around 1.1225 before bouncing marginally. Still, the common currency continues to cling to the lower end of the extended trading range, struggling to make a more decisive recovery as the greenback stays steady along with US Treasury yields. On the four-hour timeframes, the pair remains capped by the descending 20-SMA, adding to a downbeat technical picture. Should the downside pressure intensify anytime soon, the euro may challenge the 1.1200 handle for the first time since July 2020.
The pound has been losing ground since last Friday, coming off local highs seen around 1.3500. Today, the pair extended losses to the 1.3357 figure, threatening the 1.3350 zone, a break below which would pave the way towards fresh 2021 lows. On the upside, the immediate resistance now arrives at 1.3400. In a wider picture, bearish risks persist as long as the prices stay below the descending 20-DMA, currently at 1.3523. For the time being, it looks like the path of least resistance for the cable is still to the downside, as the dollar remains strong and the daily RSI is pointing lower but hasn’t entered oversold territory just yet. Should the mentioned support give up, the pair would target the 1.3320 intermediate support, followed by the 1.3300 figure.
The USDJPY pair rallied to March 2017 highs beyond the 115.00 figure earlier in the day before profit-taking pushed the prices slightly into negative territory during the European hours as USD demand has waned somehow. However, the prices climbed back to the flat-line in recent trading to settle just below the 115.00 level ahead of the opening bell on Wall Street. Should the greenback exceed this barrier and confirm the latest breakout on a daily closing basis, the 115.50 region will come into the market focus next. However, it looks like traders may opt to take some profit at long-term highs, which implies that the pair could suffer a retreat in the short term while the broader bullish trend will remain intact anyway.
Gold prices keep sliding for the fourth day in a row on Tuesday, accelerating the decline amid a rallying dollar. The XAUUSD pair plunged to more than two-week lows around $1,790, where the 100- and 200-DMAs converge. The technical picture has deteriorated further since yesterday when the prices failed to hold above the 20-day SMA. In recent trading, the bullion derailed the $1,800 psychological support for the first time since November 5, suggesting downside risks could persist further at least in the short term. the precious metal could extend losses to the $1,760 area that triggered a bounce and a subsequent rally that brought the prices to five-month highs around $1,877 just a week ago.
The Kiwi keeps sliding after failed attempts to hold above the 100-DMA late last week. Today, the New Zealand dollar dipped to the 0.6920 region for the first time since mid-October and was last seen flirting with the lower end of the extended range. Should the mentioned lows give up anytime soon, the pair would extend losses to the 1.6900 figure that may act as support and trigger a bounce. On the other hand, there is room for further losses at this point, as the daily RSI hasn’t entered oversold territory just yet. On the hourly charts, NZDUSD has settled below the key moving averages, struggling to attract demand despite the RSI has already slipped below the 30 figure. On the upside, the immediate barrier now arrives at 0.6935, followed by the 0.6960 region.
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