In a wider picture, bearish risks for the euro persist while below the 200-week SMA
The USD index came off long-term peaks seen just below the 104.00 figure on Thursday. The index has settled below 103.00 during the early European hours and could see a deeper retreat amid the overbought conditions. It looks like the buck should slid to lower levels in order to attract the renewed buying pressure in the coming days. EURUSD bounced back above 1.0500, now targeting the 1.0600 figure that represents the immediate barrier for bulls. Should the pair exceed this level, the 1.0650 intermediate resistance will come into the market focus. On the four-hour charts, the euro was last seen flirting with the descending 20-SMA while the RSI looked directionless in neutral territory, suggesting the pair could lack the momentum to see more robust gains in the near term. In a wider picture, bearish risks persist while below the 200-week SMA, today at 1.1450. EURUSD is finishing the week with solid losses despite the recent bounce off multi-year lows.
On Thursday, GBPUSD derived support from the 1.2400 figure to bounce off fresh mid-2020 lows as the buck retreated across the market. The pair advanced to the 1.2570 region ahead of the weekend, now targeting the 1.2600 mark. However, the recovery potential looks limited from here as the USD index so far refrains from a deeper bearish correction despite the overbought conditions. On the weekly timeframes, the technical picture remains downbeat, with the RSI pointing south while looking slightly oversold. Should GBPUSD refrain from regaining 1.3600 on a daily, weekly and monthly closing basis, the prices may give up recent gains to come under the selling pressure again. If the dollar regains the upside impetus ahead of next week’s Fed meeting, the pound could challenge 1.2400 to notch fresh long-term lows around 1.2360.
USDJPY exceeded the 131.00 mark yesterday for the first time in twenty years before retreating marginally. On Friday, the pair extended the downside correction towards 129.75 but managed to regain the 130.00 mark in recent trading, looking steady at this stage. The dollar was last seen changing hands around 130.35, down 0.4% on the day. In the near term, the buck could struggle to get back above 131.00, but it looks like the pair would refresh long-term highs after some hesitation at lower levels, with upside risks persisting despite the extremely overbought conditions. On the hourly charts, 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 51 figure.
Earlier in the week, bitcoin failed to hold above the $40,000 figure and continues to face resistance represented by the descending 20-DMA, today at $40,100. On Friday, the coin was once again rejected from this moving average, threatening the $39,000 figure during the European trading hours. Considering the persistent correlation between cryptocurrencies and stock markets, it looks like bitcoin will struggle to regain the upside momentum later in the day as US stock index futures are pointing to a lower open after a strong rally. Failure to hold above $39,000 would pave the way to mid-March lows seen around $37,600 earlier in the week. As long as the prices stay above this zone, the bearish potential looks limited. Should demand for crypto reemerge, the bitcoin price may need an extra driver to overcome the mentioned 20-DMA, followed by the 100-DMA, currently at $40,900.