The buck could see deeper losses if the upcoming economic reports disappoint
The safe-haven dollar weakened on Tuesday amid a widespread risk-on rally triggered by some progress in Russia-Ukraine peace talks. The USD index remains depressed, now trading below the 98.00 mark and losing 0.56% on the day during the European hours. The index has been losing ground since yesterday as risk rally pushed the prices lower from long-term highs seen around 99.40. As such, EURUSD bounced strongly to extend the ascent to early-March highs around 1.1160 before retreating marginally in recent trading. Now, the common currency could target the 1.1200 figure, followed by the descending 100-DMA, currently at 1.1250. However, it looks like the upside potential could be limited at this stage as the euro just corrects higher while staying within a broader downtrend. Now, traders shift their focus to US four-quarter GDP data and the ADP employment report ahead of the key jobs data due on Friday. Should the figures surprise to the downside, the bearish pressure surrounding the greenback will intensify ahead of the weekend.
GBPUSD derived support from the 1.3050 zone on Tuesday to bounce back to the flat-line just below 1.3100 on a daily closing basis, Today, the pair extended recovery to 1.3160 where the 20-DMA capped intraday gains. As the greenback retreats across the market, the pound could stay on the offensive in the near term. However, the upside potential looks limited from here, especially as the pair is yet to regain the key moving averages including the mentioned one. On the four-hour charts, the technical picture has improved somehow but still looks neutral, which implies that the cable could struggle to stage a more robust and sustained ascent in the near term. On the downside, the immediate support now arrives at 1.3100, followed by the 1.3080 zone. In a wider picture, bearish risks continue to persist as long as the prices stay below a slightly descending 200-DMA, today at 1.3565. On the weekly timeframes, the technical picture looks bearish, with the prices holding marginally above November 2020 lows seen in mid-March.
USDJPY peaked above 125.00 at the start of the week and has been correcting lower since then. The pair extended the retreat towards the 121.30 zone before bouncing marginally in recent trading. The yen managed to recover partially due to the dollar weakness while the overall trend remains bullish, and the USD is likely to resume the rally after a local correction triggered by overbought conditions as well. On the hourly timeframes, USDJPY is now stuck between the key moving averages, struggling for direction around the 122.00 figure. A daily close above this mark would help somehow ease the pressure surrounding the dollar in the short term. The next upside target arrives at 121.80 while on the downside, the immediate support lies around 121.30. In a wider picture, as long as the pair stays above the 115.00 figure, USD bulls remain in control.
At the start of the week, BTCUSD extended the ascent to the $48,200 zone where the 200-DMA capped gains. Since then, the digital currency has been trending lower from fresh 2022 highs, albeit the selling pressure looks limited at this stage. The coin extended the retreat to $46,500 before regaining the $47,000 mark in recent trading. However, it looks like bitcoin may need some extra losses in order to attract renewed demand and challenge the mentioned highs in the coming days. The immediate significant support now arrives at $46,000, followed by the $44,000 region. On the four-hour charts, the ascending 20-SMA, currently at $46,900, has been capping losses so far. Should the pair derail this moving average anytime soon, the focus will shift towards the mentioned support levels. On the upside, the key bullish target remains at $50,000.