Rising Treasury yields that added to the dollar’s appeal after rallying to fresh 16-year highs
The US dollar extends its rally on Thursday, holding above the 106.50 zone as buying interest persists around fresh November highs registered around 106.84 during the previous session. Now, the buck seems to have enough upside momentum to challenge fresh multi-month tops in the near term, especially as the DXY keeps trading above the 106.00 key figure that represents the immediate significant support at this stage. The greenback keeps deriving support from a hawkish Fed and rising Treasury yields that added to the dollar’s appeal after rallying to fresh 16-year highs. The USD index looks ready to extend its ascent towards 107.00 if the buying pressure persists. A wider technical picture stays positive as well. Should the DXY see further bullish pressure, a decisive break above the 106.85 zone would open the way towards fresh multi-month tops. Meanwhile, EURUSD stays depressed, trading around early-2023 lows seen at 1.0488. The pair is changing hands below 1.0500 as of writing, up 0.1% on the day.
The cable found resistance represented by the 200-DMA earlier this month and has been trending lower since then. Furthermore, the pair fell below 1.2200 to register fresh March lows around 1.2110 during the previous session. The pound bounced marginally today, but still lacks the momentum to stage a more robust recovery despite oversold conditions. Now, the pound holds around the lower end of the extended trading range, also staying below the key SMAs. During the European deals, the pair has settled in positive territory, trying to attract demand at this stage. The daily RSI turned slightly positive in oversold territory, suggesting the pair could see some relief in the immediate term before resuming the downside move. In recent trading, GBPUSD was changing hands around 1.2150, up 0.15% on the day. On the downside, the immediate significant support is now represented by the 1.2120 zone. On the upside, a decisive recovery above 1.2200 would pave the way to a more sustained bounce.
The USDJPY keeps adding to gains these days as the Japanese yen struggles to attract demand. The dollar turned slightly negative during the European trading hours on Thursday, holding just below fresh October highs seen around 149.70 during the previous session. The pair has settled just below the 149.50 figure, staying elevated despite overbought conditions. As the pair still stays above the ascending 20-DMA, downside risks remain limited in the near term. The dollar was last seen changing hands around 149.30, down 0.21% on the day. Now, the greenback needs to make a decisive break above the 149.70 region in order to extend the rally towards the 150.00 psychological level. The daily RSI turned slightly lower, staying in neutral territory, suggesting the dollar could see some bearish consolidation in the immediate term before resuming the ascent. On the hourly timeframes, the technical picture has deteriorated somewhat, with downside risks persisting as prices are now below the 20-SMA while the RSI is correcting lower in neutral territory.
The price of gold keeps bleeding, trading with bearish bias since peaking at $1,947 last week. After a slide from local highs, the precious metal dipped back below the key SMAs that turned back into resistance levels. Now, the bullion holds around the lower end of a local trading range, lacking the momentum to regain the $1,900 zone that represents the nearest significant barrier for buyers. Should the pressure intensify any time soon, the bullion could threaten the $1,870 zone for the first time since March. Gold was last seen changing hands around $1,877, up 0.18% on the day. On the weekly timeframes, the bullion still looks vulnerable as the metal remains under the 20-SMA that continues to cap gains. On the upside, the immediate target is now represented by the $1,890 region, followed by the $1,900 region. On the four-hour charts, the XAUUSD pair has settled below the key SMAs while the RSI looks bullish, painting a mixed technical picture.