The cable plunged to the 1.1650 zone for the first time since March 2020
The US dollar surged across the market on Friday as Powell delivered a more hawkish speech than expected. Earlier on Monday, the USD index advanced to fresh twenty-year highs around 109.50 before retreating marginally amid some profit-taking. EURUSD briefly peaked just below the 1.0100 mark to finish around 0.9965 ahead of the weekend. The euro remains under pressure on Monday, struggling amid a stronger dollar, albeit refraining from posting fresh multi-year lows so far. The shared currency was last seen changing hands around 0.9929, shedding nearly 0.3% on the day. Failure to hold above 0.9900 would pave the way to fresh long-term lows while on the upside, the descending 20-DMA, today at 1.0120, continues to represent the immediate upside target for the pair. On the four-hour charts, the RSI is tending slightly higher in neutral territory while the prices still hold well below the key SMAs, painting a mixed short-term technical picture.
GBPUSD came under renewed selling pressure on Friday amid dollar’s broad-based rally. The pair extended the decline at the start of the week, falling to the 1.1650 zone for the first time since March 2020. The pound was last seen clinging to the lower end of the extended trading range, down 0.72% on the day. As such, the bearish potential persists at this stage, especially as the pair holds well below the descending 20-DMA, today at 1.1990. On the four-hour charts, the bearish momentum has eased somehow as the RSI has steadied around the 30 figure, suggesting the selling momentum could slow down at this stage. On the longer-term timeframes, the technical picture stays negative, with the prices holding below the key weekly SMAs while the RSI keeps pointing lower despite the oversold conditions.
USDJPY rallied on Friday to finish around 137.50 ahead of the weekend. Today, the pair extended the ascent to mid-July highs around 139.00, holding well above the 20-DMA, today at 135.20. Following the initial rally, the dollar retreated back below the barrier that capped the ascent towards multi-year tops seen last month around 139.40. In the near term, USDJPY needs to hold above the 138.00 mark for the bullish momentum to persist. A decisive break above the 139.00 mark would bring long-term tops back into the market focus. In case of a deeper downside correction, the nearest support should be expected around 138.25, followed by 138.00 and the 137.60 figure. As of writing, the greenback was changing hands around 138.67, up 0.84% on the day.
Gold prices failed to regain the 20-DMA last week to come under solid selling pressure on Friday amid a stronger dollar. The bullion peaked at $1,765 on Thursday before retreating to $1,738 ahead of the weekend. On Monday, the XAUUSD pair extended losses to $1,720 for the first time in a month as the greenback remains on the offensive. The yellow metal was last seen changing hands around $1,723, down 0.88% on the day. A failure to hold above $1,711 in the short term would bring the $1,700 level back into the market focus. On the upside, the directionless 20-DMA represents the key short-term target for gold. A decisive break above this moving average, today at $1,767, would pave the way towards the $1,800 barrier last seen in mid-August. In a wider picture, the downtrend from all-time peaks seen above $2,000 in March is likely to continue in the coming weeks or month as the precious metal has largely lost out to the dollar as a safe haven this year.