Buying interest has reemerged amid the renewed risk aversion
After four days of losses, the US dollar resumed the ascent on Monday, recovering from the first bearish week since mid-July. Ahead of the weekend, the USD index briefly derailed the 106.00 figure before bouncing marginally. Today, the DXY is holding around 106.60 as buying interest has reemerged amid the renewed risk aversion. Still, the buck seems not to have enough upside momentum to challenge fresh cyclical tops in the immediate term, even as the DXY keeps trading above 106.00. The greenback keeps deriving support from a hawkish Fed that adds to the dollar’s safe-haven appeal. However, the USD index could intensify its ascent towards 107.50 if risk aversion persists. A wider technical picture stays positive as well. Should the DXY see further bullish pressure, a decisive break above the 107.00 figure would open the way towards fresh multi-month highs. Meanwhile, EURUSD is back under pressure on Monday after a three-day bounce from late-2022 lows seen at 1.0448 last week. The pair is changing hands around 1.0527 as of writing, down 0.55% on the day.
The cable found support around fresh March lows around 1.2035 last week and has been recovering since then. The pair has settled above 1.2150 in early European deals to turn slightly negative at the start of the week after a rally towards 1.2260 ahead of the weekend. The pound is trending lower now, still lacking the momentum to stage a more robust bounce despite oversold conditions. Now, the pound holds slightly above the lower end of the extended trading range, also staying below the key SMAs. During the European deals, the pair has settled in negative territory, trying to attract more demand at this stage. The daily RSI points slightly lower in neutral territory, suggesting the pair could see more pressure in the immediate term before bouncing. In recent trading, GBPUSD was changing hands around 1.2176, down 0.50% on the day. On the downside, the immediate significant support is now represented by the 1.2100 zone. On the upside, a decisive recovery above 1.2200 would pave the way to a more sustained bounce.
The USDJPY pair keeps adding to gains these days as the Japanese yen still struggles to attract demand. The dollar holds slightly positive during the European trading hours on Monday, holding marginally below fresh October 2022 highs seen around 150.15 last week. The pair has settled just above the 149.00 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 149.15, up 0.1% on the day. Now, the greenback needs to make a decisive break above the 150.00 region in order to extend the rally. The daily RSI turned directionless, staying in neutral territory, suggesting the dollar could see some consolidation in the immediate term before rallying to fresh tops. On the hourly timeframes, the technical picture looks neutral, with prices stuck between the key SMAs while the RSI is directionless in neutral territory.
The price of gold bounced aggressively on Monday to open with a solid bullish gap before retreating partially. Ahead of the weekend, the metal briefly dipped to fresh March lows around $1,810 before finishing in positive territory due to a decline in the US dollar. Still, the overall picture remains bearish. 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 just above the lower end of a cyclical trading range, staying well below the $1,900 zone. Should the pressure intensify any time soon, the bullion could retarget the $1,800 zone for the first time since March. Gold was last seen changing hands around $1,849, up 0.97% on the day. On the weekly timeframes, the bullion remains vulnerable even as the metal bounced from the key SMAs. On the upside, the immediate target is now represented by the $1,860 region, followed by the $1,865 zone. On the four-hour charts, the XAUUSD pair has settled around the 55-SMA while the RSI looks directionless, painting a neutral technical picture.