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Daily Technical Insights 12 October 2022



The EUR/USD pair edged higher on Tuesday, witnessing some recovery momentum and flirted with the 0.968~ 0.974 area despite the dismal mood that dominated financial markets. The pair is now trading at 0.9762, posting a 0.66% gain daily. EUR/USD stays in the positive territory amid a weaker US dollar across the board, as the retreating US bond yields exerted bearish pressure on the greenback and lifted the EUR/USD pair higher. The Sentiment remains deteriorated amidst fears that global central bank tightening would slash corporate earnings while dampening the economic outlook, but a scarce macroeconomic calendar and US first-tier events scheduled for later in the week limit further volatility. The Euro, the currency is likely to remain under pressure amid the fierce Russia-Ukraine tussles which raise doubts about the economic health of the old continent.

For the technical aspect, RSI indicator 48 as of writing, suggests that the pair is regaining upside strength as the RSI rose sharply towards 50. As for the Bollinger Bands, the price witnessed fresh buying and crossed above the moving average, therefore the upside traction should persist. In conclusion, we think the market will be bullish as long as the 0.9677 support line holds. Additionally, technical indicators recovered from oversold readings and the case for recovery will be firmer if the pair extends gains above 0.9836.

Resistance:  0.9836, 0.9921, 0.9986

Support: 0.9677, 0.9551


The GBP/USD pair surged on Tuesday, regaining upside momentum and refreshed its daily high above the 1.1160 mark in the US session following the outcome of the Bank of England’s gilt purchase operations. At the time of writing, the cable stays in positive territory with a 0.94% gain for the day. The US dollar trims a part of its intraday gains and turns out to be a key factor lending some support to the GBP/USD pair. For the British pound, the Bank of England announced earlier in the day that it intends to purchase index-linked gilts and reiterated that it stands ready to purchase up to 10 billion sterling of gilts each day until the end of the week. The announcement is acting as a tailwind for the GBP/USD pair today. Moreover, the latest news reported that the BoE accepted 1.957 billion sterling of offers in the first purchase operation of index-linked gilts.

For the technical aspect, the RSI indicator is 52 as of writing, suggesting the bullish tilt in the near-term technical outlook as the RSI has risen above 50. As for the Bollinger Bands, the price preserved its upside traction and climbed above the moving average, therefore a continuation of the bullish trend can be expected. In conclusion, we think the market will be bullish as the pair is heading to test the 1.1220 resistance. A four-hour close above that level could open the door for additional gains and favour the bulls.

Resistance: 1.1220, 1.1366, 1.1476

Support: 1.1023, 1.0797, 1.0392


The XAUUSD price trims earlier losses and reclaims above $1680 as of writing, due to high US T-bond yields, alongside a strong US dollar, ahead of crucial US inflation figures to be released on Thursday, which could provide some clues regarding the need for Fed aggressive hikes. Even though yellow metal rebounded drastically, the market sentiment remains deteriorated amid fears that global central bank tightening would slash corporate earnings while dampening the economic outlook. The US 10-year Treasury bond yield is down by four bps but around year-to-date highs of 3.92%. The International Monetary Fund (IMF) cuts its forecast for the next year to 2.7% from 2.9%in July, almost 1% less than in January. Furthermore, the IMF said that the US would extend at 1% next year, unchanged from its previous forecast, but cut its outlook from 2.3% in July to 1.6%, which adds to fears about global growth.

From the technical perspective, the RSI indicator is from 30 to 45 as of writing, indicating a rebound in the near term could be expected till RSI fell back to below 30. As for Bollinger Bands, yellow metal rebounded back to the lower area of bands and kept bullish momentum to test the 20-period moving average of around $1688. If the four-hour chart closed above that level, the bulls could expect to challenge the