The shared currency could make another recovery attempt in the near term but the overall technical picture stays bearish
The US dollar stays on the back foot as markets remain risk-positive at the beginning of the week. The USD index has been retreating for the third day in a row on Monday after peaking at fresh twenty-year highs around 109.30. Today, the greenback slipped below the 108.00 figure, shedding nearly 0.5% on the day in early European deals. Should the pressure intensify any time soon, the dollar index may target the 107.00 mark that represents the next near-term support. Against this backdrop, EURUSD extended its recovery towards the 1.0150 zone earlier in the day before retreating slightly. The pair was last seen changing hands around 1.0120, up 0.35% on the day. The immediate upside bias persists as long as the prices stay above the 1.0100 mark. The shared currency could make another recovery attempt in the near term but the overall technical picture stays bearish, with the prices holding just slightly above two-decade lows seen last week below parity.
GBPUSD plunged to fresh March 2020 lows around 1.1760 last week before bouncing back above 1.1800 on a weekly close. As a result, the daily RSI has reversed north, retaining positive bias on Monday. The pair extends its recovery at the start of the week, flirting with the 1.1950 zone, a break above which would pave the way towards 1.2000. Then, the market focus could shift towards the descending 20-DMA, currently at 1.2060. However, the cable looks unlikely to overcome this barrier any time soon, with bearish risks persisting at this stage. The pair was last seen changing hands around 1.1945, up 0.80% on the day. On the four-hour timeframes, GBPUSD is back above the 20-SMA while the RSI looks neutral, which implies that the UK currency could take a pause before another leg lower. Failure to hold above 1.1900 would pave the way towards the mentioned long-term lows.
USDJPY has been retreating since Friday, albeit the downside pressure looks limited so far, with the dollar holding just slightly below 24-year highs seen around 139.40 last week. The pair is oscillating around 138.00 on Monday, holding well above the ascending 20-DMA that represents a major support at this stage. On the shorter-term timeframes, the prices are now stuck between the key simple moving averages while the RSI retains bullish bias, suggesting the bearish potential remains limited despite the overbought conditions. In other words, USDJPY is likely to resume the ascent after a pause, with 140.00 target staying in the market focus. Should profit-taking continue in the immediate term, the greenback may get back below 138.00, followed by the 136.60 intermediate support zone on the way towards the ascending 20-DMA, today at 136.45. In a wider picture, the overall bullish trend remains intact while above at least the 120.00 mark last seen in March.
The Aussie bounced from two-year lows seen last week around 0.6680 to climb back towards the descending 20-DMA on Monday. Of note, the pair last touched this moving average, today at 0.6845, more than one month ago. So, a decisive break above the barrier would improve the near-term technical picture substantially. However, it looks like the pair will hardly be able to overcome the SMA on a daily closing basis as the greenback remains resilient despite the current retreat. On the hourly timeframes, the RSI is approaching the overbought territory, suggesting the upside momentum could wane soon. On the downside, the nearest support now arrives at 0.6770, followed by the 0.6740 zone and 0.6700. In a wider picture, the technical outlook remains bearish.