NZDUSD derailed the 20-DMA for the first time in more than a month
The dollar trades on the softer side to start the day. A turn in risk sentiment triggered some rebound in the greenback late on Monday, but the USD failed to shrug off the pressure. Failure to hold above the 107.00 mark in early European deals sent the buck to the 106.60 support zone in recent trading. Against this backdrop, EURUSD exceeded the 1.0200 figure to register nearly two-week highs around 1.0250. The pair may need extra impetus to overcome this intermediate hurdle and target the descending 20-DMA which arrives just below the 1.0300 mark. However, as the dollar’s downside potential remains limited, traders will hardly be able to push the European currency through this moving average any time soon. So, the pair is likely to come under renewed downside pressure after a short-lived bounce.
The pound retains bullish tone since the recent bounce back above 1.1800. The pair extends its recovery at the start of the week to exceed the 1.2000 psychological level. The cable finished off highs on Monday to resume the ascent today as the dollar keeps losing ground across the board. Now, the market focus shifted towards the descending 20-DMA, currently at 1.2050. 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 1.2012, up 0.50% on the day. On the four-hour timeframes, GBPUSD is back above the 20-SMA while the RSI looks bullish, which implies that the UK currency stay on the offensive for some time before resuming the descent. Failure to hold above 1.2000 on a daily closing basis would pave the way towards the 1.1925 immediate support zone.
USDJPY has been retreating for the third day in a row on Tuesday, 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 below 138.00 on Tuesday, still holding above the ascending 20-DMA that represents a major support at this stage. On the shorter-term timeframes, the prices remain stuck between the key simple moving averages while the RSI points lower, suggesting the bearish bias could persist in the near term amid 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 threaten the 137.60 zone, followed by the mentioned 20-DMA, today at 136.50. In a wider picture, the overall bullish trend remains intact while above at least the 120.00 mark last seen in March.
The Kiwi saw another leg higher on Tuesday to derail the descending 20-DMA in the process. Of note, the pair exceeded the moving average for the first time in more than a month, which is a positive technical signal in the short term. NZDUSD extended gains to 0.6230 and was last seen clinging to the upper end of the extended trading range. A daily close above the 0.6200 figure would add to a more upbeat technical outlook while on the downside, the immediate support now arrives at 0.6175, followed by the 0.6140 zone. Should the pair exceed the mentioned local highs, the next upside target could be expected in the 0.6155-0.6160. On the four-hour charts, the New Zealand dollar exceeded the key moving averages while the RSI trends north, which implies that the pair could at least retain a bullish tone in the very near term. In a wider picture, however, bearish trend continues to persist, with the prices holding just above May 2020 lows seen last week around 0.6060.