The pound finished slightly higher on Friday but stayed close to late-November lows
The euro advanced last week, albeit held off June highs registered around 1.0735 earlier this month. EURUSD has settled just above the 1.0600 figure, staying above the 20-DMA since early-November. The pair looks set to finish the third bullish month in a row, extending its recovery from multi-year lows seen in Autumn. For the time being, the euro is expected to stay afloat in the dominant bullish trend. Furthermore, a potential risk-on rally could send the pair to fresh multi-month highs in the near term. As such, the 1.0800 mark stays in the market focus as long as the euro holds above the 200-DMA, currently at 1.0330. However, downside risks could materialize as well, considering investor nervousness amid rising recession risks and the ongoing pandemic in China. The USD index is holding above 104.00 after a modest bounce from June lows seen around 103.45 earlier this month.
The pound finished slightly higher on Friday but stayed close to late-November lows registered a day earlier just below the 1.2000 psychological level. As the pair derailed this mark, the near-term technical picture has deteriorated somehow, with the cable finishing lower for the second week in a row. In the process, GBPUSD exited the range limited by the 20- and the 200-DMAs to settle below both moving averages. The pair could see a more aggressive decline at this stage despite the dollar lacking demand across the board. Now, the pound needs to regain the 20-DMA, today at 1.2068, in order to retain a bullish tone and resume the ascent. The daily RSI looks directionless in neutral territory, suggesting the cable could refrain from both bullish and bearish extension in the near term.
USDJPY plunged dramatically last week to fall below the descending 20-DMA and the 200-DMA in the aftermath of the Bank of Japan meeting. The central bank announced it will modify its yield curve control band from its current plus and minus 0.25% to plus and minus 0.5%. The pair dipped from the 137.50 down to a late-July low of 130.56. Following the initial sell-off, the dollar bounced marginally to settle around 132.60 eventually. As such, the downside momentum has eased but continued to persist, with the pair holding below the 133.00 mark. In the immediate term, the greenback needs to regain this level in order to avoid another major retreat. Otherwise, the pair is likely to suffer fresh losses, with the 130.00 support zone coming into the market focus at this stage.
Gold finished the week with slight gains, but failed to exit its multi-week trading range, holding around the 100-week SMA this month. After a brief jump to late-June highs around $1,825, the precious metal fell back below the $1,800 psychological level as market players opted to take some profit. Despite some retreat, the bullion retains a bullish tone, also holding above both the 200- and the 20-DMAs. The precious metal may continue to struggle for direction this week while also staying above the $1,780 mark that remains in focus for the time being. The XAUUSD pair is likely to stay above the mentioned 20-DMA in the near term, but in a wider picture, bearish risks persist despite the recent rally. On the downside, the nearest significant support now arrives at $1,780, followed by the $1,750 zone.