The shared currency may retarget parity should the 1.0070 figure give up
The dollar continues to march north amid higher bond yields and subdued risk demand. The US currency rallied in the aftermath of more hawkish FOMC meeting minutes than expected coupled with the subsequent aggressive signals from the central bank officials. The USD index surged to one-month highs around 107.75 and was last seen clinging to the upper end of the extended trading range, looking poised to extend the ascent towards the 108.00 next target. Against this backdrop, EURUSD plunged to 1.0070 for the first time since mid-July, suffering deep weekly losses amid a combination of recession risks in Europe and Fed’s hawkish policy. Should the mentioned lows give up in the near term, the shared currency may retarget parity eventually as USD bulls remain on the offensive across the board.
GBPUSD keeps bleeding for the third session in a row on Friday as the greenback keeps trending north these days. Earlier in the day, the cable derailed the 1.2000 figure for the first time since late-July. The pair extended losses towards 1.1880 today, staying below the 1.1900 mark ahead of the weekend. The pound was last seen changing hands around 1.1892, down 0.3% on the day. As such, the recovery potential looks limited at this stage, especially as the pair is holding well below the 20-DMA, today at 1.2105. On the four-hour charts, the bearish momentum persists even as the RSI has entered oversold territory, suggesting the path of least resistance remains to the downside for the time being. On the longer-term timeframes, the technical picture stays bearish as well, with the prices holding below the key weekly SMAs while the RSI keeps pointing lower.
USDJPY has been retaining a solid bullish bias since the start of the week. The pair advanced to 135.90 yesterday to finish at the upper end of the extended trading range. On Friday, the dollar retains bullish bias, holding above 136.00 during the European trading hours after a rally towards 136.75 earlier in the day. Also, the dollar holds well above the 20-DMA, today at 134.42. Earlier in the month, the prices managed to hold above the 100-SMA, adding to a resilient technical picture. In the near term, USDJPY needs to confirm the recent break above 136.00 for the bullish momentum to persist. A decisive break above the mentioned highs on a daily closing basis 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 136.00, followed by 135.70 and the 135.00 figure.
Gold price has been losing ground since the start of the week, holding below the 20-DMA on Friday. Earlier in the day, the yellow metal derived support from late-July lows around $1,750 to bounce marginally in recent trading. Still, the bullion looks set to finish the week with solid losses after a four-week winning streak. Should the bullion fail to hold above the $1,750 psychological level in the short term, the next downside target near the $1,730 region will come back into the market focus for the first time in three weeks. On the upside, recovery above the 20-DMA, now at $1,767, is critical for any substantial recovery while the key bullish target for short-term buyers arrives at $1,800. On the weekly timeframes, the XAUUSD pair stays well below the key SMAs while the RSI reversed south, suggesting the metal could stay on the defensive in the near term.