Earlier in the day, EURUSD extended gains to the 200-DMA that acted as the intraday resistance. The pair was then rejected from the 1.1085 area and turned red after four days of gains in a row. During the local correction, the prices dipped below the 100- and 50-DMAs. Despite the retreat, it’s too early to bet on further losses as the general picture remains positive as long as the common currency stays above the 1.0880 area. At the same time, the daily RSI starts to show some signs of a reversal, suggesting downside risks could persist, at least in the immediate term.
GBPUSD stays nearly flat on Friday after a rejection from highs around 1.23. The inability to challenge this barrier may signal some weakening in the bullish impetus. The daily RSI turned flat after its recent ascent to the neutral zone. Now, the pound needs to hold above the 1.22 handle so that to avoid a deeper correction after a three-day rally. Once below this level, the pair could extend local losses to the levels below 1.20. On the upside, as long as the pound remains below the key moving averages, downside risks will likely persist despite the recent bounce from lows.
USDJPY extended yesterday’s decline that has so far stopped above 108.00. The 200-DMA at 108.00 acted as the intraday support and prevented deeper losses in the intraday charts. The daily RSI turned lower but the bias remains too modest to bet on further losses. As long as the dollar stays above the 20-DMA around 107.70, bearish risks are limited. On the upside, the key resistance comes at 111.70, from where the pair was rejected several times earlier this week.
The cross dropped sharply on Friday and got below all the three moving averages in the process. Earlier this week, the pair failed to make a clear break above the 121.00 level and thus attracted fairly aggressive profit-taking that sent the euro to the levels marginally above 119.00. This level is now in market focus as a break below it will mark a deeper correction. The daily RSI has reversed south and confirms that the downside risks persist and may get even stronger in the near term. Should the pair manage to stay above 119.00, is may retarget the 50-DMA around 119.75.
USDCHF continued to decline on Friday, having registered more than one-week lows below the 0.96 handle. Now, as the 50-DMA turned into resistance again, the short-term technical picture has deteriorated further, and it looks like the dollar has started to form a symmetrical triangle in the daily timeframes. If so, the pattern will be finished around 0.92 in the medium term. However, the daily RSI doesn’t give strong bearish signals, suggesting the downside pressure may be limited, at least in the near term.