U.S. dollar recovers from Monday's lows. Further downside likely

The U.S. dollar index managed to recover from a 14-day low on Monday at 99.87 with prices turning bullish yesterday. However, the gains remain limited within Monday's range with further upside likely to see the 100.80 resistance being established. Failure to break out higher could result in a continuation to the downside towards 99.50 support followed by further declines towards 99.88 region.

EURGBP Intra-day Analysis

EURGBP (0.8470): EURGBP has established support near the 0.8330 support zone and is showing signs of further upside continuation. On the 4-hour chart, the inverse head and shoulders pattern is likely to see price extend the gains towards 0.8586 if the neckline resistance at 0.8646 will be breached. On completion of the measured objective to 0.8586, EURGBP could retest the inverse head and shoulder's neckline resistance for support which could eventually see a further continuation to the upside. Beyond 0.8586, EURGBP can be seen posting the correction to 0.8888.

USDJPY Intra-day Analysis

USDJPY (114.26): The dollar continues to remain range bound against the yen near the 114.00 resistance level with prices currently seen trading with the Monday's range. No clear bias exists unless prices can break out above 114.00. In this case, further upside could see the dollar extending the gains to 118.00 at the very least. However, the strong rally is showing signs of exhaustion, and a break down below 113.50 could trigger a correction towards 109.750 - 109.50 support level.

XAUUSD Intra-day Analysis

XAUUSD (1167.32): Gold prices have settled in a range from Monday's outside bar that was formed with price action staying limited yesterday. Support is seen back at 1161.00 which could be tested in the near term with a break below this support likely to see gold prices extend the declines further towards the 1150 support level. To the upside, 1170 remains the key resistance level that gold prices are currently battling and only a clear bullish close on the daily session could see any hopes for further upside to the 1200 handle.