The shared currency remains well below parity after a dip towards the 0.9730 zone
The US dollar extended the Fed-induced rally to settle around 113.00 on Thursday. However, the upside momentum has waned on Friday as traders opted to take some profit ahead of the weekend. As such, the euro fell for the fourth consecutive session yesterday, to settle back below the key moving averages. The shared currency remains well below parity after a dip towards the 0.9730 zone. On Friday, EURUSD turned positive on the day, but still struggled below 0.9800 in early European deals as the selling pressure surrounding the greenback stayed limited. The EURUSD pair was last seen changing hands around 0.9774, adding 0.23% on the day. Should the upcoming US jobs report come in stronger than expected, the euro may lose its modest recovery momentum to finish the week on a downbeat note as the greenback could resume the ascent across the market.
The pound plunged on Thursday after a dovish hike by the Bank of England. The central bank raised rated by 75 basis points, also warning that the UK is in a “prolonged recession”. Against this backdrop, the selling pressure surrounding the cable intensified to push the pair back below the 20-DMA, down to two-week lows around 1.1150. GBPUSD has bounced marginally since then, to settle slightly above 1.1200 in early European deals. The pair is unlikely to stage a more decisive bounce at this stage even as the dollar retreats across the board. In the immediate tern, traders will continue to digest the recession warning from the Bank of England, suggesting the pound could stay depressed for a while. Now, GBPUSD needs to regain the mentioned moving average, today at 1.1315, in order to see a more significant rebound. On the positive side, the daily RSI turned slightly higher in neutral territory, suggesting the cable could at least refrain from a deeper retreat in the near term.
The USDJPY pair has been flirting with the ascending 20-DMA after a failure to regain the 149.00 level at the start of the week. Should the pair finish below the moving average, today at 147.90, the near-term technical picture will deteriorate somehow, but a broader uptrend is likely to stay intact while above the 125.00 zone last seen in April. As a reminder, USDJPY notched fresh multi-year highs around 152.00 in October to finish the third consecutive month with solid gains. In the immediate term, the greenback needs to stay around 20-DMA in order to avoid a deeper retreat. Otherwise, the pair is likely to suffer fresh losses, with the 145.00 support zone coming into the market focus at this stage. The USD was last seen trading just below 148.00, shedding 0.21% on the day.
Gold failed to make a decisive break above the 20-DMA last week, staying indecisive since then. However, the precious metal resumed the ascent on Friday, retaining a solid bullish bias during the European session. The XAUUSD pair is back targeting the mentioned moving average (today at $1,650) while adding 1.13% on the day. The bullion was last seen changing hands around $1,647 after a bounce from the $1,616 support zone that capped the sell-off on Thursday. The XAUUSD pair is likely to stay below the mentioned 20-DMA in the near term, with bearish risks persisting despite the ongoing recovery. On the downside, the nearest significant support now arrives at $1,640 zone. A failure to hold above this region would pave the way towards the $1,600 mark last seen in April 2020. On the upside, a decisive bounce above the 20-DMA would pave the way towards the $1,675 intermediate barrier on the way to the $1,700 mark.