The pound is unlikely to see a more decisive bounce at this stage even as the dollar lacks demand
The euro faded the latest corrective bounce off local lows around 0.9730 as risk demand waned across the financial markets. Should the upside momentum reemerge, the EURUSD pair could further advance beyond parity to settle above the 100-DMA. On the upside, the nearest resistance now arrives around 1.0070, followed by the 1.0100 mark last seen two months ago. In order to tighten the grips, euro bulls need validation from this level after the recent reversing from a two-month-old resistance line. In general, the near-term outlook for the European currency looks cautiously bullish, with recovery momentum fragile, especially as risk demand continues to ebb across the globe. The dollar itself holds above 110.00 on Thursday while also struggling to extend yesterday’s bounce that was capped by the 110.65 zone. The USD index was last seen changing hands around 110.30, down 0.36% on the day.
The pound peaked around 1,1430 earlier in the week before plunging on Wednesday along with other risky assets. The cable retreated towards 1.3333 to settle below the 20-DMA in recent trading. The pair is unlikely to see a more decisive bounce at this stage even as the dollar lacks demand across the board. In the immediate tern, traders will focus on the US CPI report due later in the day. Should the data come in higher than expected, the greenback may see another rally, thus pressuring GBPUSD. Now, GBPUSD needs to regain the 100-day moving average, today at 1.1660, in order to see a more significant rebound. On the positive side, the daily RSI stays afloat in neutral territory, suggesting the cable could at least refrain from a deeper retreat in the near term. GBPUSD was last seen changing hands around 1.1370, up 0.13% on the day.
The USDJPY pair has settled below the directionless 20-DMA after a failure to regain the 147.00 level earlier in the week. The greenback stays mostly on the defensive since then, albeit refraining from a major retreat. The pair holds below the key moving average, today at 147.82, with the near-term technical picture looking neutral. At the same time, a broader uptrend stays 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 regain 147.00 in order to avoid another 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 around 146.44, unchanged on the day.
During the latest rally, gold exceeded the $1,700 psychological level for the first time in a month to extend gains towards $1,722. After peaking, the bullion retreated amid profit-taking to close around $1,707 on Wednesday. In the process, the bullion briefly derailed the descending 100-DMA before slipping back below this significant barrier. The precious metal struggles for direction on Thursday while also staying above the $1,700 mark that remains in focus foe the time being. The bullion was last seen changing hands around $1,705, unchanged on the day. The XAUUSD pair is likely to stay below the mentioned 100-DMA in the near term, with bearish risks persisting despite the recent rally. On the downside, the nearest significant support now arrives at $1,700, followed by the $1,685 zone.