The USDJPY pair could challenge the 134.00 figure in the short term
The US dollar extends the advance on Tuesday, with the USD index flirting with one-week highs above 106.60 during the European trading hours. Traders now look ahead to the Fed minutes, due out on Wednesday, for clues about the pace of rate hikes in the future. Should the central bank deliver a less hawkish tone, the greenback may lose the upside momentum to reverse the recent gains later in the week. In a wider picture, the US currency remains within a broader bullish trend, albeit holding off multi-year tops seen last month above 109.00. On the downside, a major support arrives at 101.30, followed by the 100.00 psychological level last seen in April. EURUSD fell below the 20-DMA at the start of the week, extending losses to the 1.0130 zone on Tuesday. Should the shared currency fail to hold above 1.0100, the selling pressure will intensify in the near term.
The pound has been pressured for the fourth session in a row on Tuesday as the dollar extends its broad-based recovery. The pair failed to hold above the 20-DMA and the 1.2100 mark, signaling further deterioration in the near-term technical outlook. GBPUSD dipped to two-week lows around 1.2000 during the European hours before bouncing marginally. Failure to hold above this intermediate barrier for USD bulls would pave the way towards the 1.1960 zone, followed by the 1.1900 psychological level. On the four-hour charts, the downside momentum has intensified after a break below the key moving averages. Adding to a more downbeat tone, the RSI continues to point south in neutral territory, suggesting the cable could see deeper losses in the near term. On the longer-term timeframes, the technical picture stays bearish, with the prices holding below the key weekly SMAs while the RSI turns slightly lower.
The dollar regained a solid bullish bias on Tuesday after flat close at the start of the week. The pair extended the ascent to 133.95 and was last seen clinging to the upper end of the extended trading range, up 0.36% on the day. Despite the recent spike in volatility, the dollar still remains stuck between the 100- and 20-DMAs. The fact that the prices managed to hold above the 100-SMA suggests the pair stays resilient, 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 could challenge the 134.00 figure should the bullish momentum persist. On the upside, a decisive break above the 20-DMA, today at 134.63, would bring long-term highs above 139.00 back into the market focus. In case of a downside correction, the nearest support should be expected around 133.25.
Gold prices fell abruptly on Monday and has been under pressure since then. The XAUUSD pair has settled just above the $1.770 support zone, followed by the ascending 20-DMA, currently at $1,761. The bearish potential remains limited while above this moving average last seen in late-July. Earlier this month, the bullion failed to hold above the $1,800 figure and has been struggling in consolidation mode since then, with bearish bias intensifying these days. Should the pressure continue to build in the near term, the price may derail the mentioned moving average and see deeper losses. On the upside, a decisive bounce above $1,790 would open the way back towards $1,800. However, downside risks continue to persist in the near term, especially as the US dollar keeps rising across the board.