EURUSD needs to regain at least the 1.1200 mark in order to shrug off some of the weakness stemmed from the rallying USD
The dollar fell across the board late on Wednesday in a knee-jerk reaction to a more cautious tone from the Fed. However, the greenback proceeded to some recovery on Thursday as Treasury yields bounce back up as well. As such, EURUSD came off one-week highs seen around 1.0640 to settle below 1.0600 in early European deals. The recent short-lived bounce doesn’t alter a bearish view of the common currency, with downside risks persisting both in the near- and medium-term. The technical picture continues to point downwards, especially as the euro failed to challenge the descending 20-DMA (today at 1.0715) during the recent rally. On the four-hour charts, the pair has settled above the 20-SMA but the directionless RSI implies that the bullish potential remains limited at this stage. In a wider picture, EURUSD needs to regain at least the 1.1200 mark in order to shrug off some of the weakness stemmed from the rallying USD.
GBPUSD exceeded the 1.2600 figure to register one-week highs around 1.2640 on Wednesday due to a widespread retreat in the dollar. The pair gave up some of the gains since then, trading water below 1.2600 during the European hours. The cable was last changing hands around 1.2575, down 0.36% on the day. As the prices failed to stage a more robust and sustained bounce, the path of least resistance remains to the downside for the time being. In the immediate term, however, the cable could receive a boost from the Bank of England’s decision to hike rates. In the longer run, the downside pressure will likely continue to persist, especially as GBPUSD remains well below the key moving averages while the monthly RSI looks directionless in neutral territory. As such, mid-2020 lows around 1.2400 stay in the market focus at this stage. On the upside, the immediate significant resistance now arrives just above 1.2800 where the descending 20-DMA lies.
USDJPY derived support from the 128.60 zone during the sell-off witnessed on Wednesday. After bouncing from this zone, the pair turned positive today, targeting back the 130.00 figure during the European hours. In the immediate term, the bullish momentum could be limited, but the overall technical picture remains constructive, especially as the dollar has been holding above the ascending 20-DMA for two months already. On the weekly timeframes, USDJPY looks unchanged so far after eight weeks of gains in a row. On the downside, the nearest support now represented by the mentioned 20-DMA. As long as the prices stay above this moving average, the path of least resistance remains to the upside despite the overbought conditions.
Gold prices have been retaining a bullish tone for the third day in a row on Thursday. After peaking at $1,903, the bullion gave up some intraday gains while staying elevated during the European session. In the process, the XAUUSD pair exceeded the 100-DMA for the first time since late-January. However, the yellow metal needs to make a decisive break above $1,900 on a daily closing basis to confirm the latest breakout and extend the ascent in the near term. The technical picture suggests that the yellow metal could face another sell-off that will take the prices below mid-February lows seen around $1,850 earlier in the week. In the near term, gold prices could come under renewed selling pressure ahead of the weekend if the US jobs figures exceed expectations on Friday, thus pushing the greenback north.