EURUSD rallied above the 1.0100 figure to notch mid-August highs just below the 1.0200 mark
The US dollar derailed the 108.00 mark for the first time in 2.5 weeks amid the persisting risk-on sentiment in the global financial markets. Also, the greenback is pressured by a stronger euro after the recent rate hike by the ECB. The USD index fell to 107.80 on Monday and could extend the decline in the days to come should US inflation slows down further. The next target for sellers arrives at 107.60. Against this backdrop, EURUSD rallied above the 1.0100 figure to notch mid-August highs just below the 1.0200 mark during the European trading hours on Monday. The shared currency was last seen changing hands around the upper end of the extended trading range, adding mor than 1.5% on the day. A daily close around 1.02 would be a confirmation of another short-term breakout. However, the euro would stay depressed in a wider picture, with bearish risks persisting in the longer-term.
Similarly, the pound extended its bounce from fresh March 2020 lows seen just above 1.1400 last week. The pair regained the 1.1600 figure and extended the ascent to the 1.1700 zone during the European hours on Monday 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 0.95% on the day. Now, the pound needs to challenge the immediate upside target represented by the descending 20-DMA, currently at 1.1712. On the four-hour charts, the bearish momentum has abated as the RSI keeps moving north, approaching oversold territory. Meanwhile, the weekly RSI bounced from oversold levels and points higher, adding to a more upbeat technical picture.
USDJPY fell on Friday after a ten-day rally that brought the pair to fresh 24-year highs around 145.00 last week. The dollar derived support in the 141.50 zone to regain the ascent on Monday. After an early rally towards 143.50, the prices retreated back below 143.00. Still, the pair keeps holding well above the ascending 20-DMA, today at 139.04. The dollar was last seen trading around 142.70, up 0.13% 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 arrives at 147.00. On the downside, the prices could get back below 140.00 in case of a deeper retreat in the near term.
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, 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. In the immediate term, the metal needs to hold above $1,720 and challenge the descending 20-DMA, today at $1,732.