The Australian dollar could retest mid-2020 lows registered last week in the 0.6760 area
The USD index remains on the offensive at the start of the week, targeting twenty-year highs seen last week around 107.80. The greenback attracted buying interest after some retreat, extending the ascent amid rising expectations for another 75-basis point rate hike by the Fed. After a short-lived correction amid profit-taking, the USD index regained the 107.00 figure, adding 0.5% on the day. The price was last seen flirting with the 107.60 zone that represents the immediate barrier for buyers. As broad USD demand persists, EURUSD holds just above the 1.000 mark that capped further losses on Friday. The subsequent recovery was short-lived to attract renewed selling pressure on Monday, with the shared currency shedding 0.57% on the day. Should the sell-off continue in the short term, the pair may threaten the 1.000 figure again. On the upside, a decisive bounce above 1.0200 would pave the way to a more pronounced recovery amid oversold conditions.
The cable finished above 1.2000 on Friday but failed to preserve the upside momentum to come under renewed pressure on Monday after a two-day bounce. So far, however, the decline has been capped by the 1.1950 intermediate support, followed by the 1.1900 mark that was derailed last week for the first time since March 2020. Should the prices manage to regain the 1.2000 psychological level on a daily closing basis, the immediate selling pressure surrounding the British currency will ease marginally. However, the overall technical picture remains bearish, with downside risks persisting both in the shorter-term and weekly timeframes. Also on the negative side, the daily RSI continues to point south, while on the hourly charts, the pair has slipped below the key moving averages, signaling lack of improvement in the immediate picture. Should GBPUSD stay below 1.2000 on a daily closing basis, the 1.1875 zone could be threatened next.
USDJPY exceeded the 137.00 mark for the first time in 24 years to notch fresh tops around 137.30 before retreating marginally amid profit-taking. As the pair keeps advancing north, the 140.00 mark comes into the market focus. The greenback remains on the offensive, holding just below the 137.00 mark during the European hours. For now, the path of least resistance remains to the upside, especially as the daily RSI remains in neutral territory. Should the dollar come under pressure in the near term, the nearest support is expected at 136.30, followed by the 20-DMA, today at 135.50. On the hourly charts, the pair is holding above the key moving averages, adding to an upbeat technical picture. As such, the downside potential looks limited. In a wider picture, the overall bullish trend remains intact while above at least the 120.00 mark last seen in March.
The Aussie is back under pressure following a two-day recovery. During the recent bounce, the pair failed to challenge the key descending 20-DMA that arrives just below the 0.6900 mark last seen in early-July. AUDUSD was last seen changing hands around the 0.6800 figure, shedding 0.69% on the day. Should this level give up any time soon, the pair may retest mid-2020 lows registered last week in the 0.6760 area. On the four-hour charts, the technical outlook has deteriorated after the pair’s failure to hold above the 20-SMA while the RSI reversed lower in neutral territory, which implies that there is room for deeper losses in the immediate term. On the upside, the nearest target now arrives at 0.6855, followed by the 0.6800 mark and the mentioned 20-DMA, currently at 0.6895. A decisive break above this moving average would pave the way towards the 0.7000 psychological level last seen in mid-June.