Failure to hold above the ascending 20-week SMA would imply that USDJPY has probably peaked already
As risk sentiment keeps improving, the safe-haven dollar continues its retreat at the start of the week. The USD index failed to regain the 103.00 figure, shedding nearly 0.5% in early European trading hours, with technicals pointing further retracement after last week’s losses. The index was last seen changing hands around 102.20, threatening the 102.00 figure. Against this backdrop, the common currency advanced to one-month highs around 1.0680 in early European trading hours and was last seen clinging to the upper end of the extended trading range, suggesting the EURUSD pair could see fresh local highs in the near term. The immediate target now arrives at 1.0700. However, as the financial markets remain nervous and unstable, EURUSD could lose the upside momentum and reverse recent gains should risk aversion reemerge.
GBPUSD has been advancing north for the third session in a row on Monday. The pair climbed exceeded the 1.2500 barrier and was last seen threatening the 1.2600 mark for the first time since May 5. Should this level give up in the near term, the cable may challenge this month’s highs around 1.2640. On the four-hour charts, however, the RSI is about to enter the overbought territory, suggesting the upside potential could be limited from here. On the positive side, the pound has settled above the key moving averages, retaining the bullish bias for the time being. On the downside, the immediate support now arrives at 1.2530. followed by the 1.2500 handle and the 1.2465 zone where the 20-DMA arrives. In a wider picture, GBPUSD stays within a broader downtrend after a plunge to two-year lows around 1.2155 earlier this month.
USDJPY is back under pressure on Monday as the dollar stays on the defensive across the board. The pair is holding slightly above the 127.00 mark that represents the key support in the immediate term, as failure at this level would pave the way towards the 125.80 area. On the hourly timeframes, the buck got back below the 20-SMA, with the RSI pointing slightly lower, suggesting the path of least resistance remains to the downside for the time being. The near-term outlook remains downbeat as long as the pair stays below the 20-DMA, today at 129.20. Should the prices regain this moving average, the 130.00 mark will come back into the market focus. On the downside, failure to hold above the ascending 20-week SMA would imply that USDJPY has probably peaked already.
USDCHF resumed the decline after a short-lived pause witnessed on Friday. The pair failed to preserve the upside bias to extend losses to a one-month low of 0.9667 and was last seen clinging to the lower end of the trading range. The next bearish target now arrives at 0.9625, followed by the 0.9600 mark. In a wider picture, the market focus is shifting gradually towards the ascending 100-DMA, today at 0.9380. The pair may have peaked at the 1.0000 psychological level earlier this month, especially as this figure is strengthened by the descending 200-monthy SMA. USDCHF was last seen changing hands around the mentioned low, losing 0.80% on the day. In case of a bounce, the immediate upside target could be expected in the 0.9670-0.9660 zone. However, the path of least resistance in the near term remains to the downside.