As the US dollar surged across the board to extend the rally, the cable plunged to historic lows at the start of the week
The US dollar surged across the board to refresh multi-year tops, this time above the 114.00 mark. The USD index climbed to the 114.50 zone before retreating partially. The buck has slipped below 114.00 since then while staying resilient and strong, suggesting another rally could be expected after some hesitation amid overbought conditions. Risk aversion coupled with the Fed’s aggressive rate hikes keep supporting the buck. As such, EURUSD dipped to the 0.9550 zone before recovering back above 0.9600. The pair was last seen changing hands around 0.9687, marginally lower on the day. Should the shared currency regain the 0.9700 figure on a daily closing basis, the immediate bearish pressure will improve somehow. The path of least resistance remaining to the downside while below at least the 1.0300 mark where the descending 100-DMA arrives.
As the US dollar surged across the board to extend the rally, the cable plunged to historic lows at the start of the week. GBPUSD fell to the 1.0350 zone before trimming losses to 1.0750 in recent trading. Despite the subsequent bounce, the pair stayed negative on the day, licking wounds after aggressive sell-off. The pound was also pressured by concerns over the UK’s fiscal package as traders doubted that new measures, including tax cuts, could cure the British economic problems. In the near term, the cable could stay on the defensive despite oversold conditions, with parity coming into the market focus as the pair derailed the 1.0500. Should the prices fall back below this level at this stage, the pair could threaten the 1.0300 next support zone, followed by the 1.00 mark. On the hourly timeframes, the RSI is back in neutral territory, pointing north.
USDJPY saw a volatile week as the Japanese government has finally intervened the market to buy the yen. As a result, the pair slumped from fresh 24-year tops just below 146.00 down to 140.00. Still, the dollar refrained from a major slump to regain the bullish bias ahead of the weekend. The pair finished above the ascending 20-DMA, retaining positive momentum on Monday. The dollar regained the 143.00 zone, targeting the 144.00 figure during the European trading hours. As such, the mentioned moving average switched back into support while multi-year highs are coming back into the market focus. In a wider picture, the USDJPY pair looks set to extend the ascent in the medium term. After some hesitation, USDJPY could climb back to the mentioned tops and refresh multi-year highs beyond 146.00.
The price of gold traded lower last week, holding below the $1,700 psychological level since mid-September. Earlier this month, the bullion fell below the descending 20-DMA, attracting more intense selling pressure. Last week, the XAUUSD pair fell below $1,640 mark for the first time since April 2020 before rebounding marginally. The yellow metal fell to fresh lows around $1,626 on Monday to settle around $1,646 since then, trying to regain bullish bias at the start of the week. However, recovery potential looks limited as the dollar jumped to fresh long-term tops and stays strong. In the coming days and weeks, XAUUSD is likely to hold below the $1,700 mark, with downside risks persisting while below the mentioned 20-DMA, today at $1,692. As such, the moving average strengthens the $1,700 resistance zone at this stage. A failure to regain $1,675 in the near term implies another negative week for the metal.
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