USDJPY extended gains to 130.23 today before reversing south in recent trading
The dollar gives up yesterday’s gains, targeting the 102.00 handle again. The USD index failed to extend the recent rally that was capped by the 102.75 region as the selling in equities and bonds hit pause at this stage. Now, the focus shifts to the ADP’s private sector employment report, followed by NFP employment data due on Friday. EURUSD is targeting the 1.0700 level that represents the immediate resistance after a two-day sell-off. As of writing, the pair was changing hands around 1.0688, up 0.4% on the day. Should the common currency fail to overcome the 1.0700 figure on a daily closing basis, another local sell-off could be expected. On the weekly charts, the euro turned negative after the recent slide but could yet regain the momentum if the greenback fails to stage a significant bounce in the coming days. In the immediate term, the nearest support arrives at 1.0640, followed by the 20-DMA, currently at 1.0618.
The cable bounced from the 20-DMA during the recent slide to turn positive on Thursday amid widespread profit-taking surrounding the greenback. The pair found a short-term bottom around 1.2460 to get back above 1.2500. However, the pound is yet to confirm the latest recovery on a daily closing basis as the momentum looks indecisive so far. On the positive side, the daily RSI is pointing higher in neutral territory while the prices hold above the mentioned moving average, suggesting GBPUSD could retest the 1.2600 handle in the near term. Otherwise, the market focus would shift back to the 20-DMA that has been capping losses since May 20. On the four-hour timeframes, the technical picture looks constructive, but the pair is yet to overcome the key moving averages that could prevent the prices from a more sustained recovery.
On Wednesday, USDJPY rallied above the 130.00 figure for the first time since mid-May. The pair extended gains to 130.23 today before reversing south in recent trading. Still, the downside pressure seems to be limited at this stage, with the greenback holding above 129.50 while also staying above the 20-DMA at this stage. It looks like the pair could see another retreat before regaining the 130.00 barrier eventually, with the overall outlook for the US currency looking upbeat in a wider picture. On the hourly charts, USDJPY is now back below the ascending 20-SMA while the RSI is pointing south, which implies that the buck could stay on the defensive in the near term before attracting demand at lower levels. The nearest support now arrives at 129.40, followed by the mentioned 20-DMA, currently at 128.65.
The Aussie briefly climbed to nearly one-month highs on Wednesday before losing some upside momentum to finish nearly unchanged. After a rally towards 0.7230, the pair slipped back below 0.7200 that remains in the market focus today as the bullish bias reemerged. AUDUSD was last seen changing hands around 0.7190, up 0.22% on the day. Of note, yesterday’s rally was capped by the 100-DMA, followed by the 200-DMA, suggesting the Aussie could need extra impetus to challenge the local resistance on the way towards 0.7300. On the downside, the immediate support arrives at 0.7140, followed by the 0.7100-0.7090 zone. In a wider picture, AUDUSD continues its recovery from mid-2020 lows registered last month.