The shared currency keeps clinging to the lower end of the trading range
The US dollar ended slightly higher on Tuesday to finish below the 109.00 handle. Today, the USD index extend its recovery even as risk aversion has abated. The US currency was last seen flirting with the 109.00 mark, with traders awaiting fresh catalysts to set the tone for currency markets. Should the upcoming economic data out the United States exceed expectations, the greenback may receive extra boost ahead of the weekend due to the rising rate hike bets. As such, EURUSD came back under pressure following two days of gains. The pair slipped back under parity on Wednesday, shedding 0.37% on the day. The shared currency keeps clinging to the lower end of the trading range, albeit refraining from a deeper retreat towards fresh long-term lows. In the near term, the euro may regain parity but any sustained recovery is unlikely at this stage.
The cable has been losing ground for the fourth day in a row on Wednesday as dollar demand reemerged. The pair extended the decline towards fresh March 2020 lows around 1.1620 and was last seen clinging to the lower end of the extended trading range, losing 0.11% on the day. As such, the bearish potential persists at this stage, especially as the pair keeps distancing itself from the descending 20-DMA, today at 1.1943. On the four-hour charts, the bearish momentum has eased somehow as the RSI holds in neutral territory, 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 briefly exceeded the 139.00 figure on Tuesday to finish marginally higher. However, the greenback failed to extend the ascent, trading under some pressure today. The pair keeps holding well above the ascending 20-DMA, today at 135.57 while also clinging to the upper end of the extended trading range. Following the initial rally, the dollar retreated back below 139.00 and was last seen trading around 138.67, down less than 0.1% on the day. In the near term, USDJPY needs to hold above the 138.00 mark for the overall bullish momentum to persist. A decisive recovery above the 139.00 mark would bring long-term tops around 139.40 back into the market focus. In case of a deeper downside correction, the nearest support should be expected around 138.00, followed by the 137.60 figure.
Gold prices failed to regain the 20-DMA last week to come under solid selling pressure these days. The bullion peaked at $1,765 on August 25 and has been struggling since then. On Wednesday, the XAUUSD pair extended losses to $1,713 for the first time in more than a month as the greenback remained on the offensive. The yellow metal was last seen changing hands around the mentioned lows, down 0.68% on the day. A failure to hold above $1,700 in the short term would bring the $1,680 zone back into the market focus. On the upside, a slightly descending 20-DMA represents the key short-term target for gold. A decisive break above this moving average, today at $1,763, 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.
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