The euro could refrain from a more sustained bounce, with downside risks persisting for the time being
The dollar has settled around more than one-week lows below the 104.00 figure on Monday, struggling to attract buying pressure as risk sentiment remains upbeat at the start of a new trading week. Following Friday’s rally on Wall Street, Asian stocks advanced across the board today, with European indices following suit as oversold markets proceeded to an upside correction. EURUSD is flirting with the descending 20-DMA for the first time in more than two weeks, adding 0.25% on the day. However, the shared currency is unlikely to regain the 1.0600 mark on sustained basis in the near term. Furthermore, the euro may fail to overcome the mentioned moving average at this stage as the dollar’s downside potential remains limited. On the four-hour charts, the technical picture looks mixed as the pair is clinging to the upper end of the recent trading range while the RSI is turning flat-to-lower, suggesting the euro could refrain from a more sustained bounce, with downside risks persisting for the time being.
GBPUSD briefly rallied to ten-day highs around 1.2330 early on Monday before trimming intraday gains in recent trading as traders were spooked by the descending 20-DMA that arrives at 1.2355. The pair was last seen changing hands just below the 1.2300 mark, adding 0.27% on the day. As the cable failed to hold above the 1.2300 level that has been capping gains since last week, any significant ascent looks unlikely at this stage, with long-term lows seen below 1.2000 earlier this month staying in the market focus. 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 moving average.
USDJPY is back under pressure after some modest recovery witnessed ahead of the weekend. The pair has settled around the 135.00 mark, struggling to overcome the 135.40 immediate barrier on the way to 24-year highs seen last week around 136.70. Despite the ongoing retreat, the overall technical picture remains bullish, with the overall uptrend intact, especially as the dollar holds above the ascending 20-DMA last seen nearly a month ago. Furthermore, the pair could hit 140.00 in the coming weeks should the US Treasury yields continue to move north in the short term. But first, the greenback will have to overcome the 137.00 hurdle that represents the immediate significant barrier for USD bulls. In the immediate term, as the USD lacks demand, USDJPY could spend some time in consolidation before resuming the ascent towards the mentioned targets.
BTCUSD has steadied these days, staying confined to a tightening trading range after a strong pick up in volatility witnessed earlier this month. Over the weekend, the pair was holding marginally above $21,000 in relatively thin trading. On Monday, the largest digital currency by market capitalization struggles around the $21,500 intermediate barrier, holding slightly positive on the day. Now, the $22,000 mark remains in the market focus while on the downside, the $20,000 level represents the key immediate target for sellers. On the hourly charts, the technical picture has improved somehow, but the overall tone stays cautious as the market remains vulnerable to deeper losses at this stage. As such, bitcoin is likely to resume the decline after a short-lived consolidation, with late-2020 lows seen earlier this month around $17,600 staying in the market focus.