Should the pressure surrounding the greenback continue to ease in the immediate term, the shared currency may enter negative territory
The dollar stays pressured for the fifth session in a row as safe-haven demand waned amid positive risk sentiment. The USD index fell to two-week lows around 106.40 in early European deals, with risks remaining skewed to the downside in the near term. However, should the ECB fail to inspire euro bulls on Thursday, the greenback may see a reversal after a solid downside correction. EURUSD is now flirting with the descending 20-DMA, currently at 1.0280, that has been acting as resistance for more than a month already. A decisive break above this barrier would further improve the near-term technical picture. The pair was last seen changing hands around 1.0235, up just 0.13% on the day as the dollar came off local lows to trim losses across the market. Should the pressure surrounding the greenback continue to ease in the immediate term, the shared currency may enter negative territory and get back below the 1.0200 mark.
The pound has been rising for the fourth consecutive session on Wednesday, retaining bullish tone since the recent bounce back above 1.1800. The pair extended its recovery at the start of the week to exceed the 1.2000 psychological level. The cable finished off highs on Tuesday to resume the ascent today as the dollar keeps losing ground across the board., albeit at a slower pace. In the process, the market focus shifted towards the descending 20-DMA, currently at 1.2035. This moving average has been capping gains since yesterday, suggesting the pair may need extra impetus to overcome the barrier last seen on June 10. 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 0.15% on the day. Failure to hold above 1.2000 on a daily closing basis would pave the way towards the 1.1925 immediate support zone.
USDJPY struggles for direction on Wednesday, holding slightly above the 138.00 figure during the European hours. The pair came off fresh 24-year highs seen around 139.40 last week but stays afloat despite the overbought conditions, refraining from a more decisive bearish correction. The pair also continues to hold above the ascending 20-DMA, today at 136.60, suggesting USD bulls are still in the game. 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. Still, 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 137.40 zone, followed by the mentioned 20-DMA. In a wider picture, the overall bullish trend remains intact while above at least the 120.00 mark last seen in March.
USDCAD has been on the defensive since last Friday as the overall tome surrounding the safe-haven greenback turned sour. The pair extended losses to fresh two-week lows around 1.2855 and was last seen changing hands just above the lower end of the extended trading range. However, as the downside momentum has slowed since yesterday, the bearish potential looks limited at this stage. On the negative side, the pair derailed the 20-DMA, today at 1.2950, in the recent sell-off that took the prices from November 2020 highs seen above 1.3200 earlier this month. On the hourly charts, USDCAD remains capped by the descending 20-SMA while the RSI points south, suggesting the pair could at least stay on the defensive in the immediate term. On the upside, the nearest target now arrives at 1.2900, followed by the 20-DMA which lies around 1.2950. A decisive break above this moving average could improve the near-term technical outlook for the US dollar.