Should the CPI report surprise to the upside, the euro may suffer even deeper losses in the near term
The dollar has steadied after yesterday’s rally that pushed the USD index back above the 103.00 mark amid a plunge in the euro and other riskier assets in the aftermath of the ECB meeting. The index is now in a wait-and-see mode ahead of the inflation report that will set fresh tone for USD pairs ahead of the weekend. EURUSD stays just above the lower end of the extended trading range, struggling below the 20-DMA. Should the CPI report surprise to the upside, the pair may suffer even deeper losses in the near term. On the downside, failure to hold above 1.0600 would pave the way towards the 1.0550 intermediate support, followed by 1.0500. Also on the negative side, the shared currency derailed the 20-DMA for the first time in three weeks, while the daily RSI preserves a bearish slope in neutral territory, suggesting there is room for further losses in the near term. As such, the nearest upside target is now represented by the mentioned moving average, currently at 1.0655.
GBPUSD has been on the defensive for the third day in a row on Friday, being pressured by a stronger dollar amid a risk-off tone that dominates global financial markets these days. In the process, the cable derailed the 20-DMA that now turns into the immediate resistance. The pair extended losses to 1.2470, followed by the 1.2430 zone that capped losses earlier in the week. On the four-hour charts, the pound is flirting with the descending 200-SMA while the RSI is pointing south, suggesting there is room for further losses at this stage, especially as the prices failed to hold above the 1.2500 figure that now represents the nearest bullish target. As such, the outlook for the pair looks bearish while in a wider picture, the pound remains within a strong downtrend, holding just above two-year lows seen in May around 1.2150. The bearish trend remains intact while below the descending 200-DMA, today around 1.3300.
USDJPY rallied to fresh twenty-year highs around 134.55 early on Thursday before erasing nearly all intraday gains. The pair has finished above 134.00 but failed to extend the advance on Friday, correcting lower during the European hours amid overbought conditions. The dollar was last seen changing hands around 133.85, down 0.36% on the day. On the downside, the immediate support now arrives at 133.00, followed by the 132.50 zone. On the hourly charts, the pair has lost some bullish momentum, with the RSI struggling for direction while the prices dipped back below the descending 20-SMA. Still, the USDJPY pair stays within a strong uptrend that is unlikely to be derailed anytime soon. After the current downside correction, the pair may resume the ascent towards fresh multi-year highs, with the next major target arriving at 135.00.
Gold prices were mostly pressured this week, struggling to hold above $1,850 amid the rallying dollar. Still, the safe-haven metal has been somehow supported by elevated economic and geopolitical concerns. The XAUUSD pair briefly climbed to $1,875 last week but failed to preserve the upside momentum and retreated back to the flat-line. At this stage, gold prices struggle around the 20-SMA, also holding just above the 200-DMA that has been capping losses these days. Should this moving average, today at $1,842, give up, the yellow metal may see a deeper drop towards $1,830 in the near term. In a wider picture, the bullion remains vulnerable as well, but rising economic concerns will continue to cap the downside. On the weekly charts, XAUUSD keeps flirting with the 100-SMA since last month, with the key support arriving at $1,830, followed by the $1,800 handle and mid-May lows in the $,785 zone.