Dip buyers prevent the pound from a more aggressive decline these days
The US dollar traded marginally lower, shedding 0.22% on the day. The USD index keeps holding above the 104.00 mark and could stage another rally after some hesitation as risk aversion could reemerge at any point due to persistent recession fears. The greenback came under some pressure as risk sentiment improved across the financial markets while US 10-year Treasury yields kept correcting lower to register nearly two-week lows earlier in the day. EURUSD has settled above 1.0500 after yesterday’s plunge that took the prices to 1.0480. The pair still needs to overcome the descending 20-DMA, today at 1.0592, in order to stage a more decisive bounce from long-term lows registered last month around 1.0350. as of writing, the shared currency was changing hands around 0.0550, up 0.28% on the day. On the hourly charts, the near-term technical picture has improved since the prices have settled above the key moving averages, but the overall outlook remains bearish anyway.
GBPUSD bounced slightly on Friday, with dip buying preventing the pound from a more aggressive decline these days. The cable has settled just below the 1.2300 mark during the European trading hours, refraining from revisiting this week’s highs seen around 1.2325. Beyond this area, the descending 20-DMA arrives (currently at 1.2373). Short-term downside risks continue to persist while below this moving average. On the four-hour timeframes, the remain stuck between the key simple moving averages, trying to stage a more sustained bounce from the local lows. On the downside, the nearest support now lies at 1.2240, followed by the 1.2200 figure. In a wider picture, the pound would stay on the defensive while below the 1.3000 psychological level last seen more than two months ago. The immediate upside target now arrives at 1.2330, followed by the mentioned SMA.
USDJPY bounced after another dip witnessed during the Asian trading hours. The pair has settled just below the 134.00 mark since then, struggling for direction after two days of losses. For the time being, the greenback is unlikely to stage a sustained rally from the current levels while on the downside, the immediate support arrives at 134.25 where this week’s lows lie. Should the selling pressure reemerge aby time soon, the pair may challenge those lows and thus threaten the 134.00 mark. As the buck refrains from a more pronounced downside correction for the time being despite the extremely overbought conditions, another rally after a pause could be expected. Should the prices overcome the mentioned peaks, the 137.00 mark will come into the market focus. If the ascent continues in the coming days or weeks, USDJPY may target the 140.00 handle eventually.
Gold prices continue to face resistance represented by the 20- and 200-DMAs that converge today at $1,842. After another failed attempt to overcome this barrier, the precious metal came under severe pressure on Thursday to notch one-week lows just above the $1,820 zone today. The XAUUSD turned slightly positive in early European trading hours, still struggling to stage a sustained recovery so far despite some retreat in the dollar. The bullion is unlikely advance beyond the mentioned moving averages any time soon, with bearish risks persisting for the time being. On the downside, failure to hold above the $1,815 mark would pave the way to this month’s lows around $1,805. Should the dollar extend the retreat in the near term, the metal could stage a bounce, but any meaningful and sustained recovery looks unlikely at this stage, especially as gold struggles to capitalize on its safe-haven status as of late. In the longer term, XAUUSD could regain the $2,000 mark, but for the time being, the path of least resistance remains to the downside.