Dollar lacks bullish momentum despite massive risk aversion across the financial markets
The USD index surged on Wednesday but failed to regain the 104.00 mark that now represents the immediate barrier for dollar bulls. The buck struggles for direction today, lacking the safe-haven demand despite risk aversion continues to dominate global financial markets. EURUSD was rejected from the descending 20-DMA yesterday to settle just below 1.0500 again. Euro’s recovery attempts still look indecisive, with bearish trend staying intact both in the near and medium term. As of writing, the pair was changing hands around 1.0494, up 0.27% on the day. On the downside, the 1.0457 mark represents the immediate support, followed by the 1.0425 zone and 1.0400. In the near term, the European currency could make fresh bullish attempts, but the overall tone stays negative as long as the prices hold below at least the 1.1000 figure where the descending 100-DMA lies.
Similarly, GBPUSD failed to overcome the descending 20-DMA on Wednesday to erase previous day’s gains eventually. Today, the cable regained some bullish bias, holding marginally below the 1.2400 level. A daily close above this immediate barrier would help improve the near-term technical picture somehow, but downside risks continue to persist while below the 1.3000 mark last seen nearly one month ago. On the four-hour charts, the pair struggles around the key moving averages while the RSI is pointing sough, suggesting the path of least resistance remains to the downside at this stage. Failure at the 1.2330 immediate support would open the road towards 1.2300, followed by long-term lows seen around 1.2155 last week. On the weekly timeframes, however, the pound holds in positive territory for the first time in five weeks as the pair managed to bounce off the mentioned lows, albeit struggles to extend recovery.
USDJPY came off the 20-DMA to finish lower on Wednesday, with bearish bias persisting today. The pair extended the decline to the 127.70 zone, followed by this month’s lows seen at 1.2750 last week. Earlier this month, failure to hold above the 130.00 figure triggered profit-taking, which implies that the pair may have peaked already. However, the near-term upside potential persists as long as the dollar stays above the 121.00 figure last seen in late-March. On the hourly charts, the technical picture keeps deteriorating after failure to hold above the 20-SMA. Meanwhile, the RSI is yet to enter the oversold territory, suggesting there is room for deeper losses in the immediate term. Daily close below 127.50 would pave the way towards the 127.00 zone that capped the selling pressure in late-April.
USDCHF peaked at three-year highs around 1.0000 at the start of the week and has been losing ground since then. As the selling pressure intensified, the dollar retreated to the 0.9750 zone on Thursday and was last seen clinging to the lower end of the range. In the process, the pair derailed the 20-DMA, with strong bearish slope in the daily RSI adding to a negative short-term technical picture. As such, the market focus now shifts towards the 0.9700 where late-April lows arrive. It looks like the prices could see even deeper losses at this stage, but a broader uptrend remains intact while above a slightly ascending 200-DMA that arrives just below the 0.9300 mark. On the upside, the immediate resistance could be expected at 0.9820 where the mentioned 20-day SMA lies. Anyway, the greenback could resume the ascent after a deeper correction that may take place in the immediate term.