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Daily Technical Insights 24 November 2022


EURUSD (4-Hour Chart)

The EURUSD regained bullish strength and was trading above the 1.0360 level as of writing, with the greenback losing upside momentum following the release of economic reports. On Wednesday, economic data showed an increase to a multi-week high in jobless claims, which printed 240K compared to the previous 223K, offset by a bigger-than-expected increase in Durable Goods Orders. Moreover, the November preliminary PMI S&P Global showed a decline in the Composite index to 46.3 from 48.3, below the 47.7 market consensus.

New Home Sales jumped 7.5%, surpassing expectations. The University of Michigan Consumer Sentiment Index recovered from 54.7 to 56.8, above the 55 expected. The U.S. Crude Oil Inventories, which measures the weekly change in the number of barrels of commercial crude oil held by US firms, weakly gained too -3.691M, below the -1.055M of market forecast. While investors were pricing in the releases of a combination of data, the US dollar was losing ground across the board as US yields tumbled. The DXY index was falling by 0.73%, and the US 10-year yield slid to 3.73%, which underpinned the pair. Later, the FOMC will be released. Investors will look for clues about a potential slowdown in rate hikes, which may have a huge impact on the pair.

From the technical perspective, the four-hour scale RSI indicator surged to 62 figures as of writing, suggesting that the pair was amid strong bullish momentum. As for the Bollinger Bands, the euro is trading near the upper band, if successfully breaks through the upper band and there is no surprisingly bad news from FOMC, the pair has the chance to challenge the recent high of 1.0479 level.

Resistance: 1.0479, 1.0604

Support: 1.0228, 1.0163, 0.9961

GBPUSD (4-Hour Chart)

The GBPUSD surged and touched its highest level since mid-August above 1.2050 following the release of mixed economic data out of the United States, weighing on the US Dollar. At the same time, a risk-on impulse keeps European and US equities trading with gains ahead of the release of the Federal Reserve’s last meeting minutes this year.

Data released from the US came mixed, undermining the US Dollar. The University of Michigan Consumer sentiment came at 56.9, above estimates but below the preliminary reading of November. Delving into the report, 1-year inflation expectations were lowered from 5.1% to 4.9%, while the 5-10 year horizon remained unchanged at 3.0%.

Furthermore, US New Home Sales surprisingly jumped to 632K from 570K, even though higher mortgage rates, nearly 7%, were sparked by the Federal Reserve tightening monetary conditions. Earlier, S&P Global reported that October’s Manufacturing, Services, and Composite PMIs for the US, are flashing a recession, remaining each at 47.6, 46.1, and 46.3 respectively. Apart from this, the US Department of Commerce revealed that Durable Good Orders in October rose by 1%, above 0.4% estimates. After a combination of US data releases, investors now are awaiting for the later Federal Reserve meeting minutes to look for clues about the rate hikes policy.

From the technical perspective, the four-hour scale RSI indicator surged to 73 figures as of writing, suggesting that the pair has entered into an overbuying zone, and a corrective pullback could be expected. As for the Bollinger Bands, the pair was trading above the upper band and the size became larger, which is a signal that the upside momentum remained its strength.

Resistance: 1.2081, 1.2147

Support: 1.1765, 1.1647, 1.1367

XAUUSD (4-Hour Chart)

The XAUUSD registered minuscule gains of 0.19% and was trading at $1743 marks following the release of economic data from the United States, as the busiest day of the current week calendar failed to provide support for the US Dollar ahead of the Federal Reserve monetary policy meeting minutes.

The Core Durable Good Orders rose sharply, by 1% compared to September’s 0.3%, showing consumers’ resilience amidst a time of high inflation, elevated borrowing costs, and a deteriorated economic outlook. Delving into the report, core Durable Orders, which exclude transportation and aircraft, rose 0.5% MoM for the same period, well above September’s -0.9% contraction, and expectations of coming unchanged.

However, the US Department of Labor revealed that Initial Jobless Claims for the week ending on November 19 increased to 240K above estimates of 225K, amidst a period of high-tech companies laying off workers. Meanwhile, continuing claims climbed by 48K to 1..55 million in the week ended November 12, the highest since March, flashing signs that the labour market is easing. Later, Federal Reserve Open Market Committee (FOMC) minutes from the November meeting, which analysts will scrutinize.

From the technical perspective, the four-hour scale RSI indicator edged higher to 49 figures as of writing, suggesting that the gold has not made any decisive move. As for the Bollinger Bands, the yellow metal was trading around a 20-period moving average and the size between the upper and lower bands got closer. Hence, we think if there is no surprising news from FOMC minutes, the gold would put into sideway in the near future.

Resistance: 1748, 1784, 1800

Support: 1704, 1670