The common currency could fail to regain 1.0200 on a daily closing basis
EURUSD
The dollar is holding above 106.00 after a modest ascent on Tuesday. The USD index still struggles for direction but could switch back into volatile trading should the US data point at elevated inflation or reflect a much slower CPI growth than expected. Ahead of a key release, the greenback struggles to capitalize on risk-off trades dominating global financial markets these days. EURUSD continues to oscillate around the 1.0200 figure, still deriving support from a slightly ascending 20-DMA amid lack of USD demand. On the hourly charts, the pair is flirting with the key moving averages while the RSI is pointing lower, suggesting the common currency could fail to regain 1.0200 on a daily closing basis. 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
GBPUSD has been retaining the upside bias since the start of the week, staying positive on Wednesday but still struggling around 1.2100 during the early European hours. On the downside, the pound derives support from a slightly ascending 20-DMA, currently at 1.2060. 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 directionless, painting a mixed technical picture.
USDJPY
The USDJPY keeps 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 remains 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 135.73, would bring long-term highs above 139.00 back into the market focus.
XAUUSD
Following two days of gains in a row, gold prices turned slightly lower on Wednesday, struggling to benefit from a weaker greenback. The XAUUSD pair is treading water marginally 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. 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, the prices have settled back below the 20-SMA while the RSI points south in neutral territory, suggesting demand for the metal could stay muted in the immediate term. In a wider picture, the outlook remains downbeat while below the 20-month SMA, today at $1,812.
