The euro looks vulnerable to further losses in the short term, especially as the prices derailed the 1.0500 mark for the first time since early 2017
The USD index climbed to fresh 2017 highs above 103.00 despite the safe-haven demand has abated. The dollar index registered fresh long-term tops in the 103.70 area before correcting lower in recent trading amid some profit-taking following another aggressive rally. Should risk sentiment continue to improve in the near term, the greenback may see a deeper retreat amid the overbought conditions. So far, however, the index is clinging to the 103.30 zone, adding 0.35% on the day. Against this backdrop, EURUSD fell to fresh multi-year lows under the 1.0500 mark in Asia. The common currency plunged to 1.0480 before recovering back above 1.0500 in recent trading. Despite the bounce, the euro looks vulnerable to further losses in the short term, especially as the prices derailed the 1.0500 mark for the first time since early 2017.
GBPUSD has been losing ground for the sixth day in a row on Thursday. Earlier in the day, the pair dipped to fresh mid-2020 lows around 1.2490 before regaining the 1.2500 mark in recent trading. The cable was last seen changing hands around 1.2530, down just 0.13% on the day. The fact that the prices derailed 1.2500 for the first time in nearly two years suggests the pair could see deeper losses in the near term before a reversal takes place. On the downside, the mentioned lows are followed by the 1.2430 and the 1.2400 mark. On the four-hour charts, the RSI has steadied in the oversold territory, which implies that the pound could refrain from another plunge at least in the immediate term. In a wider picture, the cable remains strongly bearish and looks set to finish the week with dramatic losses.
The USDJPY pair advanced to twenty-year highs around 131.00 as the yen plunged amid a dovish tone from the Bank of Japan. As a result, the daily RSI has entered the overbought territory again and was last seen pointing north, which implies that further gains could lie ahead in the near term. As of writing, USDJPY was trading around 130.58 as the greenback came off peaks in recent trading. Should profit-taking continue in the near term, the US currency may get back below 130.00, but upside risks continue to persist anyway, as the Bank of Japan continues to send dovish signals while the Fed is about to hike rates by 0.5% next week. The pair is about to finish the eights bullish week in a row and could target the 132.00 figure next, while the 2012 peak arrives at 135.20.
Gold prices fell to more than two-month lows earlier on Thursday before bouncing marginally in recent trading. The XAUUSD pair dipped to $1,872 for the first time since mid-February as dollar’s strength continues to push the non-yielding metal lower. Early in Europe, the USD index came off five-year highs. As a result, the bullion turned slightly positive on the day, bouncing back above the ascending 100-DMA that was derailed for the first time since early-March. In the near term, XAUUSD could extend its sharp retracement from the $2,000 mark that capped the ascent earlier this month. Should the prices fail to hold above the mentioned lows, the $1,850 zone will come into the market focus next. In a wider picture, however, the yellow metal could regain the upside momentum as escalating geopolitical risks are extended to underpin investment demand for gold.