The cable came off long-term lows slightly but stays pressured
The US dollar is back on the offensive following a two-day slide, challenging the 110.00 mark in early European deals as safe-haven demand persists. However, the USD index could refrain from a more robust ascent in the near term as traders await the Fed meeting that concludes on Wednesday. The immediate upside barrier now arrives at last week’s highs around 110.25, followed by the 110.55 intermediate resistance on the way to twenty-year tops registered in the 110.80 region earlier this month. As such, EURUSD is back below the 20-DMA, struggling to regain parity as the greenback remains elevated amid rising Treasury yields. The pair remains vulnerable to fresh losses in the near term, with the path of least resistance remaining to the downside while below at least the 1.0300 mark where the descending 100-DMA arrives.
The cable plunged back below 1.1500 after another failed attempt to overcome the descending 20-DMA last week. On Friday, the pound saw another sell-off that has pushed the prices below March 2020 lows, down to 1.1350. The pair stays under pressure on Monday and was last seen clinging to the lower end of the extended trading range, losing nearly 0.2% on the day. In the near term, GBPUSD needs to hold above 1.1300 on a daily closing basis in order to avoid a deeper retreat. On the upside, should the cable resume its recovery, the nearest target could be expected around 1.1400, followed by the 1.1465 zone and the mentioned 1.1500 level. On the hourly timeframes, the RSI has settled in neutral, pointing north, suggesting the selling pressure could ease somehow in the near term. As such, traders now shift focus towards the 1.1400 mark.
USDJPY failed to regain the 144.00 figure to finish just below 143.00 ahead of the weekend, albeit the selling pressure looked limited due to the overall bullish sentiment surrounding the US currency. USDJPY regained the upside bias on Monday and was last seen changing hands 143.37, up 0.33% on the day. In a wider picture, the pair keeps holding well above the ascending 20-DMA, today at 140.95, with broader uptrend intact. In the near term, USDJPY needs to hold above the 143.00 mark for the bullish momentum to persist. Should the buying pressure surrounding the US dollar intensify further, a decisive rally above 144.00 could be expected. On the four-hour charts, the greenback struggles to regain the descending 20-SMA, albeit holding relatively steady at this stage.
The price bounced ahead of the weekend to come under renewed downside pressure on Monday as hawkish Fed remains in focus. The precious metal failed to hold above the descending 20-DMA last week to accelerate the decline eventually. In the process, the bullion derailed the $1,700 psychological level to notch April 2020 lows around $1,654. The XAUUSD pair keeps clinging to the lower end of the range, suggesting extra losses could be in store. A failure to attract demand at the current levels would pave the way to fresh long-term lows in the $1,610-1,600 zone in the coming days or weeks. It seems like gold prices could stay on the defensive in the months ahead as the Fed along with other central banks will continue tightening. A reversal in the gold market would take place once the US monetary authorities start reversing the rate hikes at some point in the future, probably in Q3 next year.