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Daily Technical Insights 26 October 2022



The EUR/USD pair surged higher on Tuesday, gathering bullish momentum and refreshing its daily high above the 0.9970 mark in the US trading session amid dismal economic data in the US. The pair is now trading at 0.9958, posting a 0.86% gain daily. EUR/USD stays in the positive territory amid a weaker US dollar across the board, as the weaker-than-expected US housing prices and manufacturing data on Tuesday added to the concerns about the negative impact on the economy of the Federal Reserve’s radical tightening pace. Therefore, investors’ expectations of the Fed slowing the pace of tightening has exerted bearish pressure on the US dollar and lifted the EUR/USD pair higher. For the Euro, the better-than-anticipated economic data has acted as a tailwind for the shared currency, as the German IFO Business Climate Index eases to 84.3 in October and showed that the Business Climate remained stable. The European Central Bank will announce its latest monetary policy decision on Thursday.

For the technical aspect, the RSI indicator is 70 as of writing, suggesting that the pair is facing heavy buying pressure as the RSI reached the overbought zone. As for the Bollinger Bands, the price moved out of the upper band, therefore a strong continuation of the uptrend can be expected. In conclusion, we think the market will be bullish as the pair is heading to test the 0.9986 resistance line. The four-hour chart also reflects heavy buying interest as the technical indicators now sit at the overbought zone.

Resistance:  0.9986, 1.0038

Support: 0.9836, 0.9757, 0.9667


The GBP/USD has surged from levels right above 1.1300 on Tuesday’s early US market session, rallying to 1.1500 where it seems to have found some resistance. In the domestic, the victory of Rishi Sunak in the Tory race and his pledge to restore economic stability are bringing back confidence to the markets, terrified with his predecessor’s economic plan. The re-appointment of Jeremy Hunt as chancellor of the exchequer has increased hopes that the next cabinet will be more market-friendly, which is acting as a tailwind for the British pound. On the other end, the weaker-than-expected US housing prices and consumer confidence data on Tuesday, as well as the downbeat S&P PMIs released on Monday are increasing concerns about the negative impact on the economy of the Federal Reserve’s radical tightening pace. Against this backdrop, the US dollar is losing ground against its main peers, with US Treasury Bonds dropping sharply. The benchmark 10-year yield tumbled from 4.25% earlier on Tuesday to 4.06%.

From the technical perspective, the RSI indicator is 67 on the four-hour scale as of writing, suggesting that the pounds amid strong upside tractions. As for the Bollinger Bands, the GBPUSD was breaking through the upper band, and the gap between upper and lower bands became larger, signalling that the bullish trend would continue in the near term.

Resistance: 1.1500, 1.1750, 1.1900

Support: 1.1120, 1.0953, 1.0632, 1.0392


XAUUSD price advances early in the New York session, up by 0.33% courtesy of falling US Treasury yields, while bonds climb amidst the ongoing narrative in the markets that the US Federal Reserve might slow the pace of its rate hikes. All that said, the weakened US Dollar is a tailwind for the yellow metal. Gold was priced at $1657 as of writing. The sentiment is upbeat, as shown by global equities trading in the green. As previously mentioned, market players are positioning for a possible pivot, while economic data in the US continues to show further deterioration in the country, coupled with high inflation and lower bond yields, boosted gold prices. Data side, US economic data flashed that the housing market on Tuesday, as shown by housing prices cooling down due t higher mortgages, which climbed to almost 7%, as the Fed embarked on a tightening cycle trying to tame inflation. Further data revealed by Conference Board (CB), reported that Consumer Confidence dropped from 107.8 to 102.5, less than estimates of 105.9, decreasing for the second consecutive month.

From the technical perspective, the four-hour scale, and the RSI indicator 57 as of writing, suggest that the gold was in an upbeat mood and the bullish momentum would persist until RSI hit above 70, the overbought zone. As for Bollinger Bands, the gold price was hovering between the upper band and the 20-period moving average, indicating the yellow metal remains upside trend in the near term.

Resistance: 1682, 1715, 1730

Support: 1640, 1615, 1600