In the immediate term, GBPUSD needs to hold above the 20-DMA in order to avoid deeper losses
The dollar struggles to regain the upside momentum as safe-haven demand has cooled since a short-lived rally that took the USD index to local tops around 99.00 after Fed Powell’s comments. In recent trading, however, the greenback turned slightly positive on the day to settle above 98.50. As such, EURUSD fell in recent trading after another failed attempt to overcome the descending 20-DMA, with bearish risks persisting after last week’s rejection from local highs above 1.1100. The common currency fell below 1.1000 and could at least stay under pressure in the near term as the USD bulls continue to reenter the game. On the four-hour charts, EURUSD fell back below the key SMAs while the RSI reversed lower in the neutral territory, suggesting there is room for deeper losses in the immediate term. The nearest support is now represented by yesterday’s lows that arrive around 1.0960.
GBPUSD briefly jumped to 1.3300 earlier in the day for the first time in three weeks. The pair has retreated back to the 1.3215 area where the 20-DMA capped the selling pressure. However, should this moving average give up anytime soon, the cable will see deeper losses, with the initial target arriving at 1.3150, followed by the 1.3080 zone. On the weekly charts, the pound retains bullish tone, albeit hovering below both the 20- and 100-weekly SMAs that converge around 1.3400. On the downside, the prices derive support from the 200-week SMA, today at 1.3120. As long as the pair stays above this moving average, the downside potential looks limited. In the immediate term, GBPUSD needs to hold above the mentioned 20-DMA in order to avoid deeper losses.
USDJPY has been rallying for nearly three weeks already as the Japanese yen keeps bleeding across the market. The pair exceeded the 121.00 figure for the first time since February 2016 to notch fresh multi-year highs around 121.40 before retreating marginally amid profit-taking. As the dollar extends the ascent despite the overbought conditions, it looks like the pair could retain bullish tone in the coming days, with the next target arriving at 121.70 where the 2016 top lies. Should the greenback see a deeper bearish correction in the near term, the overall bullish trend will stay intact anyway. On the hourly charts, USDJPY was last seen flirting with the 121.00 figure where the 20-SMA arrives. A daily close above this level would be a confirmation of the latest breakout.
Earlier in the day, gold prices traded directionless above $1,900, deriving some support around $1,910. However, the upside momentum reemerged in recent trading to push the bullion north, towards the $1,930 zone. Still, the precious metal stayed below the 20-DMA, with downside risks persisting as long as this moving average, today at $1,946, acts as resistance zone. It looks like the bullion will continue to tread water in the current range before deciding on the further direction. On the upside, the nearest barrier is represented by the mentioned moving average, followed by the $1,970 intermediate hurdle on the way towards $2,000. However, it looks like the yellow metal will struggle to retarget this hurdle at this stage as demand remains modest after a strong sell-off witnessed last week. On the monthly charts, however, the XAUUSD stays positive so far.