GBPUSD would stay on the defensive for the time being and could see fresh long-term lows despite the oversold conditions
The safe-haven dollar continued to rally amid economic concerns, with the USD index notching fresh 20-year highs around 104.00 on Friday morning. After the initial spike, the buck has retreated somewhat in recent trading and could see a deeper short-term correction as six Fed speakers will deliver comments on the economy and monetary policy after the NFP release. As of writing, the index was changing hands around 103.50, down 0.25% on the day. Meanwhile, EURUSD bounced slightly off multi-year lows to get back above the 1.0500 level during the European hours as the buck retreated across the market. Still, the common currency remains vulnerable to further losses, with recovery potential being limited for the time being. On the four-hour charts, the euro has settled above the 20-SMA, facing the immediate resistance around 1.0580, followed by this week’s highs in the 1.0640 area.
The cable plunged to fresh mid-2020 lows on Friday amid the rallying dollar. The pair extended losses to 1.2275 before bouncing back above 1.2300 in recent trading. The cable now needs to regain the 1.2600 mark in order to shrug off some of the downside pressure at this stage. However, it looks like GBPUSD would stay on the defensive for the time being and could see fresh long-term lows despite the oversold conditions. Failure to hold above 1.2300 would open the way towards the June 2020 low of 1.2250 that triggered a solid ascent that continues for nearly a year. As such, the pair needs to hold above this level so that to avoid even deeper losses in the days and weeks ahead. On the upside, the nearest significant target for GBP bulls now arrives at 1.2800 where the descending 20-DMA lies. bearish risks continue to persist while below this moving average that had capping gains last month.
USDJPY resumed the ascent after hitting local lows around 128.60 earlier in the week. In the process, the pair regained the 130.00 figure to face resistance around 130.80. The dollar is now within striking distance from twenty-year highs registered around 131.25 last week. However, the pair may refrain from revisiting 131.00 in the near term as the overall buying pressure surrounding the buck has abated somehow. On the weekly timeframes, USDJPY looks to finish the ninth bullish week in a row while the RSI stays well above neutral territory, which implies that the buck could face obstacles while trying to extend the ascent from here. On the other hand, the pair has been holding well above the ascending 20-DMA since early-March, suggesting the overall technical picture remains upbeat, at least while above this moving average.
Earlier in the week, the bitcoin price climbed to multi-day highs around the $40,000 figure along with stocks. However, the rally was short-lived, and the selling pressure reemerged amid massive risk aversion. Wall Street indexes fell dramatically on Thursday, pushing digital currencies lower as well. The BTCUSD pair crashed 10% at one point in time to notch the lowest level since February. After a modest bounce from $35,500, the coin has settled just above $36,000 on Friday, with the overall technical picture pointing to further losses in the near term. BTCUSD may face renewed downside pressure that would take the prices back below $36,000. On the upside, the $40,000 figure remains in the market focus for the time being. In a wider picture, the most popular cryptocurrency could slip towards $31,000-$30,000 before a sustained reversal takes place.