In the immediate term, USDJPY could get back below 131.00 amid overbought conditions, but the overall bullish tone will remain intact
The USD index surged to fresh twenty-year highs beyond 104.00 before retreating slightly. The buck climbed to 104.20 for the first time since December 2002 as US 10-year Treasury yields rose to a fresh top at 3.15%. EURUSD briefly dipped below the 1.0500 mark earlier in the day and kept flirting around this threshold during the European hours, shedding 0.40% on the day. As bears remain in control for the time being, the common currency remains vulnerable to even deeper losses despite the oversold conditions. The immediate support now arrives at 1.0470. Failure to hold above this zone would pave the way towards 2017 lows around 1.0340. Meanwhile, the USD index could settle above 104.00 on a daily closing basis to extend the ascent in the coming days should risk aversion continue to persist amid lingering worries about global recession.
GBPUSD extended losses to fresh mid-2020 lows around 1.2260 amid broad-based strength surrounding the dollar on Monday. Following the initial sell-off, the pair bounced slightly to regain the 1.2300 mark in recent trading. However, as the cable lacks recovery momentum, GBPUSD looks unlikely to stage a pronounced upside correction in the near term, especially as the dollar stays elevated across the market. On the hourly charts, the pound is flirting with the 20-SMA while the RSI looks directionless in neutral territory, suggesting the prices could struggle to get back above 1.2400 at this stage. If the risk sentiment remains downbeat, the pound could resume the plunge, with the next target arriving around 1.2250, followed by 1.2200. In a wider picture, bearish risks continue to persist as well.
USDJPY rallied to fresh twenty-year tops around 131.35 after a decisive break above the 131.00 barrier. In the process, the daily RSI has entered the overbought territory and keeps pointing north, suggesting the pair could at least retain bullish bias in the near term, with the market focus shifting towards the 132.00 mark. On the four-hour timeframes, there are some signs of a waning bullish momentum at this stage. However, the buck keeps clinging to the upper end of the extended trading range during the European hours while also holding well above the ascending 20-DMA. In the immediate term, the greenback could get back below 131.00 amid overbought conditions, but the overall bullish tone will remain intact both in the short- and longer-term.
Gold prices finished lower for the third consecutive week on Friday. Today, the selling pressure surrounding the yellow metal intensified, sending the prices to local lows around $1,859. Last week’s attempts to regain the $1,900 mark failed, bringing extra selling pressure amid the rallying dollar. Now that the bullion is back below the 100-DMA, today at $1,880, the path of least resistance is to the downside for the time being. Should the mentioned lows give up anytime soon, the prices could threaten the 200-DMA for the first time since early-February. As long as this moving average, currently at $1,835, remains intact, the downside potential looks limited. On the hourly timeframes, the XAUUSD pair has settled below the key moving averages while the RSI is pointing lower in the oversold territory, which implies that the path of least resistance remains to the downside for the time being.