The USD index remains pressured by Fed’s dovish intentions
The US dollar stays pressures these days after finishing the second bearish week in a row. The DXY thus extends its retreat from local highs seen above the 104.00 figure earlier in the month. On Tuesday, the USD index held above the 101.40 zone to slip back to late-July lows, staying on the defensive today. As such, the greenback struggles to attract buyers despite low levels, staying below the 102.00 figure since last week. This level represents the immediate upside target for the time being. In a wider picture, the DXY remains downbeat as well, pressured by Fed’s dovish intentions along with weaker-than-expected inflation data. As such, EURUSD saw fresh August highs on Wednesday to touch the 1.1055 region. After the spike, the pair has settled around the upper end of the extended trading range, suggesting the prices could target the 1.11 zone next. The immediate resistance now arrives in the 1.1065 zone that could cap the bullish momentum if the selling pressure surrounding the dollar eases in the near term.
The pound finished higher on TUESDAY as dollar fell across the board. The pair retains bullish bias today, with downside momentum looking limited at this stage. The cable thus refrained from a downside correction as the dollar’s recovery attempt failed. Also on the positive side, the pair stays above the key SMAs. In early European trading on Wednesday, the cable looks slightly bullish, holding above the 1.2700 figure. In a wider picture, the cable stays upbeat now after this month’s slide to local lows around the 1.2500 figure. The daily RSI looks directionless in neutral territory, suggesting buyers could stay on the sidelines in the immediate term. In recent trading, GBPUSD was changing hands around 1.2720, up less than 0.1% on the day. On the flip side, the immediate significant support is now represented by the 1.2670 zone, followed by the 1.2650 region where the 20-DMA lies. On the upside, a decisive ascent above 1.2735-1.2745 would pave the way to a more sustained ascent.
Last week, the USDJPY pair finished higher for the first time after five weeks of losses in a row. Still, the dollar failed to hold around local peaks registered just below the 145.00 figure. After finding resistance in this zone, the USDJPY pair reversed south to get back below the 142.00 figure. Since then, the greenback has regained this figure, albeit the upside pressure looks limited on Wednesday. The greenback has settled above 142.50, still trying to attract more robust demand, but the lack of momentum suggests the selling pressure could reemerge in the near term. Also, the pair stays well below the 20-DMA, which implies that downside risks still persist for the time being. The dollar was last seen changing hands around 142.67, up 0.21% on the day. Now, the greenback needs to decisively regain the 142.70 region in order to extend gains. The daily RSI remains in neutral territory, pointing slightly higher. On the hourly timeframes, the technical picture turned slightly downbeat, with the RSI pointing lower while prices are now slightly above the 20-SMA.
The price of gold holds mostly in positive territory this week, albeit the momentum looked fairly modest. After finding support in the form of the ascending 20-DMA, the XAUUSD pair bounced marginally and has been trending north since then. The metal extended gains to $2,070 on Friday before retreating marginally but finished the second bullish week in a row. This barrier continues to cap gains this week, with prices unchanged during the early European session on Wednesday. As such, the technical picture has improved further, with the bullion holding above the $2,050 zone. Should gold stay above this immediate support in the near term, a stronger ascent could be expected. If the pressure reemerges any time soon, the bullion could see another retreat in the days to come. On the weekly timeframes, the bullion looks positive, while a wider picture remains relatively upbeat. On the upside, the immediate significant target is now represented by the $2,070 region, where last week’s highs arrive. Once above, the focus would shift towards the $2,100 psychological level. On the flip side, the nearest support lies around $2,050 and then in the $2,031 zone where the ascending 20-DMA arrives.