The euro would stay depressed in a wider picture, with bearish risks persisting in the longer-term
The US dollar extend its bearish correction, losing ground for the third session in a row. The USD index fell below the 109.00 mark, challenging the 108.50 support zone early in Europe. Should this area give up anytime soon, the greenback could suffer even deeper losses before demand reemerges. As such, EURUSD rallied above the descending 20-DMA for the first time since mid-August to extend the ascent towards 1.0110. The shared currency was last seen changing hands around the upper end of the trading range, adding mor than 1% on the day. A daily and weekly close above the mentioned moving average would be a confirmation of a short-term breakout. However, the euro would stay depressed in a wider picture, with bearish risks persisting in the longer-term.
The pound fell towards fresh March 2020 lows just above 1.1400 earlier in the week before turning positive ahead of the weekend. The pair regained the 1.1500 figure and extended the bounce to the 1.1645 zone during the European hours on Friday as the buck stays on the defensive across the market amid profit-taking. The cable was last seen clinging to the upper end of the trading range, adding 1.24% on the day. Now, the pound needs to hold above the 1.1600 figure on a weekly closing basis in order to extend recovery next week. The immediate upside target now arrives at 1.16900, followed by the descending 20-DMA, currently at 1.1733. On the four-hour charts, the bearish momentum has abated the RSI turned north, approaching oversold territory. Meanwhile, the weekly RSI bounced from oversold levels and points north, adding to a more upbeat technical picture.
USDJPY exceeded the 144.00 figure to extend the ascent to the 145.00 zone earlier in the week. As such, the pair refreshed 24-year highs before correcting lower on Friday. The dollar fell back below 144.00 to settle just above the 142.00 mark during the European hours. Still, the pair keeps holding well above the ascending 20-DMA, today at 138.55. The dollar was last seen trading around 142.14, down 1.34% on the day. In the near term, USDJPY needs to hold above the 142.00 mark for a broader bullish momentum to persist. Should the buying pressure surrounding the US dollar reemerge, a decisive rally above 145.00 would bring fresh long-term tops into the market focus. The next major target for USD bulls now arrived at 147.00. On the downside, the prices could get back below 140.00 in case of a deeper retreat in the near term.
Following mixed dynamics during the week, gold price regained the upside bias on Friday to turn positive on the weekly charts due to a weakening US dollar. Against this backdrop, the precious metal resumed its uneven recovery from multi-week lows seen below $1,690 at the start of the month. The bullion regained the $1,700 psychological level and exceeded the $1,720 zone in recent trading, albeit refraining from revisiting this week’s highs around $1,728. The bearish pressure surrounding the metal could ease down the road as the Fed will have to proceed to cutting rates at some point. So far, however, the upside potential remains limited as expectations of more interest rate hikes will continue to cap further gains. Should the XAUUSD pair manage to hold above this year’s lows seen around $1,680 in July, the bullion could enter recovery path in the medium term.