Gold prices came off local lows, but recovery potential looks limited amid the resilient greenback
The USD index came off twenty-year highs registered above 104.00 on Monday. The safe-haven greenback finished marginally lower overnight, staying under some pressure today as risk aversion has eased since the previous session. As such, EURUSD retains a modest bullish bias on the intraday timeframes, but still staying below 1.0600 in early European deals. The pair stays around long-term lows, looking vulnerable to further losses after a pause. On the four-hour charts, the common currency keeps oscillating around the 20-SMA while the RSI is pointing slightly lower in neutral territory, suggesting the path of least resistance remains to the downside at this stage despite the recent bounce. In a wider picture, the outlook for the euro remains bearish as well, with long-term lows around 1.0470 staying in the market focus. On the upside, the immediate barrier now arrives at
GBPUSD extended losses to fresh mid-2020 lows around 1.2260 amid broad-based strength surrounding the dollar at the start of the week. Following the initial sell-off, the pair bounced slightly to regain the 1.2300 mark. 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 keeps 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 turns downbeat again, 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.
On Monday, USDJPY jumped 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, but has corrected slightly lower since then. 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 on Tuesday while also holding well above the ascending 20-DMA. In the immediate term, the greenback could get back below 130.00 amid overbought conditions, but the overall bullish tone will remain intact both in the short- and longer-term. On the upside, the nest target arrives at 132.00. However, it looks like the pair could see a deeper retreat before attracting fresh buying pressure eventually.
Gold prices dipped to the $1,850 support zone after another failed attempt to overcome the 100-DMA, today at $1,882. Should the precious metal struggle to hold above this intermediate barrier for sellers, the bullion may challenge the 200-DMA for the first time early-February. After bottoming out at the mentioned lows, the XAUUSD pair edged higher towards $1,861 in recent trading and could refrain from another sell-off in the near term. the next upside target arrives at the 100-DMA, followed by the $1,900 psychological level. On the hourly timeframes, the yellow metal has settled slightly above the 20-SMA but still lacks the upside impetus to stage a more pronounced recovery as the greenback holds steady on Tuesday. In a wider picture, the technical outlook has deteriorated further after failure to hold above the 20-week SMA.