USDJPY exceeded the 141.00 figure to extend the ascent to the 141.86 zone
The dollar looks more mixed to start the day after yesterday’s rejection from fresh twenty-year highs. The USD index came off tops seen around 110.30 at the start of the week to settle below 110.00. After a pause, the greenback could resume the ascent, adding to selling pressure surrounding the Australian counterpart. The euro fell below 0.9900 for the first time since December 2002 at the start of the week to erase the intraday losses on a closing basis. On Tuesday, the shared currency resumed the ascent, adding 0.33% on the day. EURUSD advanced to the 0.9960 zone, a decisive break above which would pave the way towards parity. In a wider picture, the euro needs to overcome the descending 20-DMA, today at 1.0060, in order to see a mode decisive and sustained recovery. At this stage, the path of least resistance remains to the downside.
The cable extended the decline towards fresh March 2020 lows around 1.1443 at the start of the week before bouncing back above 1.1500. On Tuesday, the pair extended the bounce and was last seen changing hands around 1.1570, adding 0.49% on the day. The pair stays below the 1.1600 figure following the latest slump, with bearish potential persisting at this stage, especially as the pair stays well below the descending 20-DMA, today at 1.1830. The immediate upside target now arrives at 1.1600, followed by the 1.1650 zone. On the four-hour charts, the bearish momentum has eased somehow as the RSI has settled in neutral territory, flirting with the 48 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.
The yen is trading down to fresh lows since 1998 on Tuesday. USDJPY exceeded the 141.00 figure to extend the ascent to the 141.86 zone. As a result, the daily RSI has entered overbought territory, but the pair is likely to continue the rally in the near term, targeting the 142.00 mark. As such, the pair keeps rallying while holding well above the ascending 20-DMA, today at 136.96. The dollar was last seen trading around 141.72, up 0.81% on the day. In the near term, USDJPY needs to hold above the 141.00 mark for the overall bullish momentum to persist. A decisive rally above the mentioned highs would bring fresh long-term tops into the market focus. The next major target for USD bulls now arrived at 142.00. On the downside, the prices could get back below 140.00 in case of profit-taking.
The Aussie trimmed early losses after the RBA announced a 50-basis point rate hike, as expected. The AUDUSD pair saw a relatively muted reaction to the meeting outcome as the verdict had been prices in by the market. The AUDUSD pair bounced back above 0.6800 after the decision but failed to extend the ascent and slipped back into negative territory in recent trading. Furthermore, the prices dipped to fresh mid-July lows around 0.6760 and was last seen clinging to the lower end of the extended trading range. Failure to regain the 0.6800 level in the near term would open the way towards fresh multi-week lows. On the upside, a decisive bounce above 0.6900 is necessary to neutralize selling pressure at this stage. The overall technical picture suggests the pair could stay on the defensive in the coming days or weeks.