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Daily Technical Insights 30 August 2022



The EUR/USD pair rebounded on Monday, staging a goodish recovery and climbed toward the 1.002 level heading into the US session despite the risk-averse market environment today. The pair is now trading at 0.9989, posting a 0.25% gain daily. EUR/USD stays in the positive territory amid the pullback witnessed in the US dollar, as some profit-taking on the first day of the week has dragged the US dollar down from a fresh 20-year peak near the 109.5 mark. However, the rising bets for a more aggressive policy tightening by the Fed should limit the losses for the greenback, as the hawkish remarks by Fed Chair Jerome Powell, last Friday has reaffirmed a 75 bps Fed rate hike in the September meeting. For the Euro, the hawkish comments from the European Central Bank (ECB) policymakers at Jackson Hole have provided some support to the shared currency.

For the technical aspect, the RSI indicator is 52 as of writing, suggesting that the pair is losing its bullish strength as the RSI started to decline toward 50. As for the Bollinger Bands, the price failed to preserve its upside traction and witnessed some selling, therefore a continuation of a downside trend can be expected. In conclusion, we think the market will be slightly bearish as long as the 1.0007 resistance line holds. But a break above that level could favour the bulls and confirm the bullish bias in the near term.

Resistance:  1.0007, 1.0033, 1.0089

Support: 0.9961, 0.9917


The GBP/USD pair edged lower on Monday, failing to extend its rebound and retreated to the 1.171 level to surrender most of its daily gains amid the negative shift witnessed in risk sentiment in the second half of the day. At the time of writing, the cable stays in negative territory with a 0.20% loss for the day. The further rise in the US Treasury bond yields and aggressive Fed rate hike bets both acted as a tailwind for the safe-haven greenback and exerted bearish pressure on the GBP/USD pair. Markets are currently pricing in a greater chance of a 75 bps Fed rate hike in the September meeting. For the British pound, the UK markets will remain closed due to the Summer Bank Holiday on Monday, causing the absence of any fundamental catalyst for the cable.

For the technical aspect, the RSI indicator is 40 as of writing, suggesting that the downside is more favoured as the RSI stays below the mid-line. As for the Bollinger Bands, the price regained upside traction and climbed toward the moving average, therefore the bullish momentum should persist. In conclusion, we think the market will be slightly bullish as long as the 1.1655 support line holds. On the upside, the pair could shake off the bearish pressure and make an upward correction if it breaks above the 1.1775 resistance.

Resistance: 1.1775, 1.1830, 1.1854

Support: 1.1655


Gold remains under pressure for the second day on Monday and drops to over a one-month low, around the $1,720 level during the early part of the European session. After that, gold catches some upside traction and recovers from a one-month low. The price reversed an intraday dip and surged to the $1,740 level in the US session.

Besides the hawkish comments from Fed Chair Jerome Powell last Friday, it should be noted that The European Central Bank is prepared to at least repeat the half-point increase in interest rates it delivered last month, with an even bigger move not to be excluded, which is the message from ECB officials who joined the Federal Reserve’s annual Jackson Hole symposium. Gold investors should notice that gold prices may brace for a period of high volatility as the worldwide central bank’s hawkish policy.

For the technical aspect, the RSI indicator is 44 as of writing, below the midline, suggesting that the price remains in bearish mode. As for the Bollinger Bands, the gold price hovers between the moving average and lower bound. Besides moving average is slightly downward as of writing. Therefore, downward traction could be expected. In conclusion, we think the market is still under bearish pressure as the price closed a lower low at $1,720 level on the 4H chart and technical analysis favours bearish momentum as well.

Resistance: 1765, 1783, 1803

Support: 1714, 1680