Risk demand remained muted across the financial markets in anticipation of US CPI data and Fed meeting outcome
EURUSD
The US dollar finished higher on Tuesday to see the third day of rally in a row as risk demand remained muted across the financial markets in anticipation of US CPI data and Fed meeting outcome due later in the day. After a brief dip towards local lows around 104.00 last week, the greenback jumped back to the 105.00 barrier that has been acting as support so far. During the previous session, the dollar extended the ascent towards the 105.45 zone for the first time in nearly a month. The USD index turned bearish on Wednesday, however, oscillating above the 105.00 psychological figure ahead of the mentioned events. In recent trading, the dollar was changing hands around 105.20, down 0.03% on the day. Meanwhile, EURUSD bounced after yesterday’s slide to early-May lows around 1.0720. The pair now holds around the 1.0750 zone, deciding on further direction. In European trading on Wednesday, the single currency has settled around 1.0752, adding 0.11% on the day. On the weekly charts, the broader technical picture turned negative after the recent slide.
GBPUSD
The pound has been in recovery mode for the third session in a row on Wednesday, bouncing from June lows seen around 1.2687 at the start of the week. GBPUSD extended the ascent to 1.2760, clinging to the upper end of the intraday range during the European session. As such, the cable has settled back above the 1.2700 level, with buyers cautious ahead of the Fed meeting outcome. The fact that the pair refrains from a more decisive bounce suggests the downside bias could reemerge in the near term. In recent trading, GBPUSD has settled in positive territory, with downside pressure limited at this stage. In a wider picture, the technical outlook looks neutral despite the recent jump. The daily RSI is now slightly bullish in neutral territory, suggesting potential buyers could stay in the game in the immediate term. In recent trading, GBPUSD was changing hands around 1.2752, up 0.09% on the day. On the flip side, the immediate significant support is now represented by the 1.2720 region.
USDJPY
USDJPY retains bullish bias on Wednesday, extending its recovery from mid-May lows registered in the 154.55 region earlier in the month. As the upside momentum persists, the pair stays elevated after recovery from the mentioned local lows. After a dip, the pair jumped back above the 157.00 figure but refrained from challenging the 157.50 barrier during the previous session. The latest ascent was capped by the 157.46 zone, while the greenback now needs to stay above the 157.00 figure on a daily closing basis. The pair was last seen changing hands around 157.31, up 0.16% on the day. Now, the buck needs to hold above the 156.80 region in order to stay afloat and make fresh bullish attempts, with multi-year highs around 160.00 in focus. The daily RSI stays bullish, suggesting the pair could refrain from sustained bearish attempts in the near term. Should the pressure reemerge, the dollar may derail the 157.00 support, but it looks like the pair will extend the ascent in the days to come if the Fed strikes a relatively hawkish tone.
XAUUSD
Gold prices look directionless on Wednesday, steadying after a solid sell-off seen late last week amid the rallying dollar. The bullion keeps struggling, staying under a modest bearish pressure, with $2,300 representing the intermediate support on the way to fresh local lows. Now, the XAUUSD pair needs some momentum to make a more decisive bounce, with prices struggling for direction so far today. The downside potential looks limited at this stage, however. In recent deals, the XAUUSD pair was changing hands around $2,330, unchanged for the day. On the weekly timeframes, the technical picture has improved marginally, with wider picture remaining upbeat after reaching fresh all-time highs. On the upside, the immediate significant target is now represented by the $2,340 zone, followed by the $2,350 region. Downside risks look limited while above the $2,300 figure. Should dollar reemerge in the near term, the bullion may see another retreat towards the mentioned zone.
