The cable continued to lose ground for the fifth day in a row as the buying pressure surrounding the greenback remains unabated
The common currency extended the plunge to five-year lows below the 1.0600 figure during the European trading hours on Wednesday as the US dollar index saw another rally, this time to fresh two-year highs near 102.80. The greenback continues to enjoy the flight to safety and hawkish expectations ahead of the Fed meeting due next Wednesday. The US currency retains strong bullish tone during the early European hours on Wednesday, suggesting the 2020 peak of 103.00 could be challenged in the near term. As such, EURUSD derailed the 1.0600 figure for the first time in five years to register a fresh long-term low of 1.0585 before bouncing slightly in recent trading. As the euro revisited the 1.0600 level for the first time since April 2017, price action shows that the pair is yet to find a bottom, with the outlook for the pair staying bearish amid the rallying dollar.
GBPUSD fell to fresh mid-2020 lows around 1.2535 before bouncing in recent trading. The pair turned slightly positive on the day, holding around 1.2600 during the European trading hours. The cable continued to lose ground for the fifth day in a row as the buying pressure surrounding the greenback remains unabated, with aggressive Fed rate hike bets pushing the buck north despite the overbought conditions. On the shorter-term timeframes, the RSI bounced back into neutral territory in recent trading, but the overall tone suggests the pressure could reemerge at any point to send the pair to fresh long-term lows around the 1.2500 mark. On the upside, a decisive break above 1.2600 on a daily closing basis would help ease the immediate bearish pressure somehow, but the overall technical picture remains downbeat while below the 200-wek SMA, today at 1.3100.
USDJPY extended the downside correction to more than one-week lows seen just below the 127.00 mark earlier on Wednesday before regaining the upside momentum. However, the pair failed to settle above 128.00 and retreated marginally in recent trading, suggesting the dollar could so far refrain from another rally towards fresh twenty-year highs seen around 129.40 last week. it is possible that the overbought dollar will struggle to challenge the 130.00 psychological level in the near term and could stage a bearish correction instead. In this context, the ascending 20-DMA (today at 125.70) could come into the market focus in the coming days if USDJPY fails to hold above 126.40. On the four-hour charts, the pair was last seen flirting with the 20-SMA while the RSI now looks directionless in neutral territory, suggesting the downside potential is limited for the time being.
BTCUSD plunged dramatically on Tuesday to find a local bottom in the $37,600 area that capped losses earlier today as well. After a bounce, the coin regained the $39,000 mark and was clinging to this level at the time of writing. Now that the largest cryptocurrency is back below the $40,000 psychological level, the path of least resistance is to the downside in the near term. Of note, yesterday’s gains were capped just beyond the $41,000 mark where the 20- and 100-DMAs nearly converged. At this stage, downside risks continue to persist as long as the digital currency stays below this solid barrier. On the downside, should the selling pressure reemerge anytime soon, BTCUSD could derail mid-March lows around $37,500 and shift focus to the $37,000 next support zone. On the hourly timeframes, the technical picture looks neutral for the time being as the prices are stuck between the key moving averages while the RSI is directionless around the 54 figure.