The euro is unlikely to regain parity in the short term
The dollar keeps trending south on Tuesday as risk sentiment in the global financial markets continues to improve. The USD index slipped towards the 111.00 figure, before bouncing marginally in recent trading, shedding 0.43% on the day during the European trading hours. As such, EURUSD has settled above the 0.9850 zone, holding relatively steady after the recent recovery from fresh long-term lows seen last week. The pair is now flirting with a slightly descending 20-DMA, currently at 0.9886. The pair was last seen changing hands around 0.9875, up 0.53% on the day. The euro needs to overcome the mentioned SMA on a daily closing basis in order to retarget parity. But the pair is unlikely to make a decisive break above the 1.00 handle any time soon, with downside risks persisting for the time being. The shared currency refrains from a more robust recovery as risk sentiment remains subdued.
The pound has been advancing north for the sixth day in a row on Tuesday. Last week, GBPUSD fell to all-time lows around 1.0350 to bounce strongly eventually. The pair exceeded the 1.1000 mark to extend gains towards 1.1200 ahead of the weekend, preserving the upside bias today. In the near term, the cable could stay on the offensive, especially as the pair exceeded the 20-DMA, currently at 1.1284. GBPUSD was last seen trading around 1.1385, up 0.55% on the day. Should the prices fall back below 1.1300, the pair could retest the 1.1000 support zone, followed by the 1.0860 next barrier for USD bulls. On the hourly timeframes, the RSI threatens overbought territory, while the price stays above the key SMAs, clinging to the upper end of the extended trading range. Despite the recent bounce, however, the pound is yet to preserve the upside bias as the dollar is likely to regain the ascent after a short-lived pause.
USDJPY continues to hold steady in a tightening range after the recent jump in volatility, trading marginally below 145.00 on Tuesday. Last week, the dollar briefly fell to 140.35 before bouncing back above the ascending 20-DMA that now continues to act as a key support zone. As such, the pair refrained from a major slump to regain the bullish bias that brought the prices back above 144.00. The pair was last seen changing hands around 144.70, adding 0.13% on the day. USDJPY holds steady at the mentioned levels, refraining from another retreat, suggesting the pair could retest multi-year tops in the near term. After some hesitation, USDJPY could climb back to the 145.90 zone to challenge 146.00. On the downside, the nearest support is represented by the mentioned moving average, today at 143.80, followed by the 142.70 next support zone.
Gold prices have been rallying these days, extending recovery after yesterday’s break above the 20-DMA. As such, the continues its technical bounce from 2.5-year lows seen last week. XAUUSD climbed from $1,614 to regain the $1,700 psychological level. The precious metal advanced towards the $1,710 zone for the first time since mid-September and could target the $1,725 next barrier, followed by September highs in the $1,735 area. At this stage, bullish extension could bring the price of gold to the mentioned high, but the metal is yet to confirm the latest break above the 20-DMA. Sustained strength beyond this supply zone could trigger a more decisive short-covering move and allow buyers to reclaim the $1,750 region. Otherwise, the selling pressure would reemerge to send the yellow metal back below $1,700, followed by $1,680.