The USD index surged to fresh multi-year highs around 111.80 after a decisive break above the 111.00 handle
The US dollar surged to fresh multi-year highs around 111.80 after a decisive break above the 111.00 handle for the first time in more than 20 years. The greenback derived strong support from a hawkish Fed while risk aversion added to the buying pressure surrounding the safe-haven US currency. After peaking at the mentioned tops, the buck retreated in recent trading to settle around 110.50, losing 0.76% on the day. EURUSD fell abruptly towards the 0.9800 mark before bouncing back into positive territory as USD demand has eased somehow. The shared currency, however, failed to regain the 0.9900 mark, suggesting the pair could lack the recovery momentum to target parity in the coming days while downside risks continue to persist. 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 failed to hold above the 1.1300 support zone and fell towards fresh 1985 lows around the 1.1200 figure earlier on Thursday. After the initial plunge, the GBPUSD pair bounced slightly to reenter positive territory. Still, the pair stays on the defensive as the US dollar surged across the board in the aftermath of the Fed meeting. The pound was last seen changing hands around 1.1325, adding 0.52% on the day. In the near term, GBPUSD needs to hold above 1.1300 on a daily closing basis in order to avoid an even deeper retreat. On the upside, should the cable resume its recovery, the initial target now arrives around 1.1385, followed by 1.1420, 1.1470 and the descending 20-DMA, today at 1.1520. On the hourly timeframes, the RSI holds in neutral territory and struggling for direction. The path of least resistance remains to the downside for the time being, especially as risk aversion persists across the markets.
USDJPY had been retaining a modest bullish bias since the start of the week, holding onto the upper end of the trading range. Early on Thursday, the pair revisited 24-year tops around 146.00 but failed to preserve gains and corrected lower aggressively. The dollar fell below the 144.00 support sone to derail the ascending 20-DMA for the first time since mid-August. Should the pair fail to finish the day above this moving average, today at 141.90, the short-term downside pressure could persist. In a wider picture, however, the USDJPY pair looks set to extend the ascent in the medium term due to widening divergence in monetary policy as the Bank of Japan keeps maintaining a dovish stance. After some hesitation, USDJPY could climb back to the mentioned tops and refresh multi-year highs beyond 146.00. The next upside target could be expected around 147.00.
The price of bitcoin saw another volatile session on Wednesday as the prices briefly peaked just below the $20,000 psychological level before plunging to fresh June lows around $18,200 after a failure to hold above $19,000. Today, the BTCUSD pair bounced off lows after a solid rout to settle above $19,8000, adding more than 1.7% on the day. Despite the current bounce, the largest cryptocurrency by market capitalization is likely to stay pressured along with other coins in the near term as risk demand could be subdued. BTCUSD could derail the $18,000 figure if the pressure persists, with downside risks dominating the market as long as the prices stay below the $20,000 level that represents the key near-term target for BTC bulls. After rejection from $22,700 earlier this month, the coin stays on the defensive, erasing gains seen since a major plunge witnessed in June.