EURUSD retains a mild bullish tone, deriving support from a slightly ascending 20-DMA
The US dollar remains on the defensive since Monday, holding above the 106.00 figure after a failure to challenge the 107.00 mark last week. The current subdued trading in currency markets is due to a cautious tone by traders ahead of the US inflation report due on Wednesday. The data could bring renewed volatility through the dollar’s reaction. The CPI is expected to have slowed to 8.7% от July from 9.1% previously. If so, the greenback could retreat across the market in the near term. EURUSD retains a mild bullish tone, also deriving support from a slightly ascending 20-DMA. The pair has settled around 1.0200, struggling for direction ahead of the US inflation report. In general, the shared currency is expected to stay weak in the short term, as the current situation in Europe requires significant improvements on both the geopolitical and economic fronts.
GBPUSD regained the upside bias at the start of the week, staying positive on Tuesday but struggling around 1.2100 during the early European hours. On the downside, the pound derives support from a slightly ascending 20-DMA, currently at 1.2050. The short-term downside potential remains limited while above this moving average. As such, the pound stays below local highs seen just below the 1.2300 handle that capped the recent recovery. Furthermore, GBPUSD is yet to break the downtrend that has been dominating since mid-2021. On the longer-term timeframes, the technical picture stays downbeat, with the prices holding below the key weekly SMAs while the RSI struggles for direction. On the four-hour charts, the prices are flirting with the descending 20-SMA while the RSI is pointing north, painting a slightly more upbeat technical picture.
The USDJPY pair has been treading water around the 135.00 figure since the start of the week, struggling for direction after a strong bounce from early-June lows seen around 130.40 where the ascending 100-DMA capped the downside. The dollar is now stuck between the 100- and 20-DMAs, clinging to the upper end of the trading range. The pair stays resilient despite a lackluster performance by the USD index, suggesting the yen bulls stay on the back foot amid the prolonged monetary policy easing by the Bank of Japan. In the near term, USDJPY is likely to further oscillate around 135.00 before deciding on the further direction. The pair could revisit the mentioned 100-DMA, today at 131.00, in the coming days, but a deeper and more prolonged retreat is unlikely at this stage. On the upside, a decisive break above the 20-DMA, today at 135.85, would bring long-term highs above 139.00 back into the market focus.
Gold prices have been rising for the second session in a row on Tuesday, benefiting from a weaker greenback. The XAUUSD pair is treading water just below the $1,800 psychological level that capped gains last week. Should the precious metal receive the needed impetus to overcome this barrier in the short term, the technical picture will improve further. However, the bullion is unlikely to make a decisive breakout on a daily closing basis any time soon, especially as the dollar’s downside potential remains limited. On the hourly charts, however, the prices have settled back above the key simple moving averages while the RSI points north in neutral territory, suggesting the metal could at least retain a bullish bias in the immediate term. In a wider picture, the outlook remains downbeat while below the 20-month SMA, today at $1,812.