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Daily Technical Insights 30 November 2022


EURUSD (4-Hour Chart)

The EURUSD was having difficult time gathering upside strength and hovering around the 1.0335 level as of writing, with Wall Street’s main indices declining further after the opening bell, the US Dollar was trying to attract positive traction and weighing on the pair. Earlier, the euro was initially boosted by the hopes of a potential easing in China’s strict pandemic restrictions following an unprecedented episode of unrest in the country. However, the pair failed to preserve its daily gain during the US trading session. The Conference Board’s (CB) index shaved off 2 points to come in at 100.2, a hair above the 100 consensuses. In the meantime, flash euro zone inflation figures for November are due on Wednesday, with economists polled by Reuters expecting inflation to come in at 10.4% year-on-year. The key event, however, for Wednesday will be in the comments from Fed Chair Jerome Powell. These will be scrutinised for new signals on further tightening. The Fed is widely expected to hike rates by an additional 50 basis points when it meets on Dec. 13-14.

From a technical perspective, the four-hour scale RSI indicator edged lower to 43 figures as of writing, suggesting that the pair was amid negative traction. As for the Bollinger Bands, the pair was priced in the lower area and supported by the lower band. As a result, in case the pair was falling below the lower band, the bears have the chance to test the weekly low 1.0228 level.

Resistance: 1.0497, 1.0604

Support: 1.0228, 1.0163, 0.9961

GBPUSD (4-Hour Chart)

The GBPUSD has turned south and fell below the 1.2000 level in the second half of the day on Tuesday, as the negative shift witnessed in risk sentiment seems to be helping the US Dollar find demand and forcing the pair to stay on the back foot. The US equities wavered as Wall Street opened, as the St.Louis Fed President James Bullard said that the Fed has “a ways to go to get a too restrictive policy,” adding that the first 250 bps was to get rates neutral. He emphasized that rates need to be at around 5% to 7% through 2023 and 2024. In fact, money market futures have priced in a 50 bps hike in December, with odds of a 75 jumbo increase at 15%. Apart from this, the Covid-19 outbreak has not escalated as initially thought, as global equities remained mixed but tilted to the upside on early Tuesday. According to the Wall Street Journal, the National Health Commission urged local governments to avoid unnecessary and lengthy lockdowns.  On the data side,  the Conference Board (CB) Consumer confidence, decreased to 100.2 a 4-month low. Lynn Franco, senior director of economic indicators at the Conference of Board, said that the combination of inflation and interest rate hikes will continue to pose challenges to confidence and economic growth into early 2023.

From the technical perspective, the four-hour scale RSI indicator edged lower to 39 figures as of writing, suggesting that the pair was surrounded by strong bearish momentum. As for the Bollinger Bands, the pair was pricing along with the lower band and trying to find some support from it, meaning that the British Pound is likely to move downward in the near future.

Resistance: 1.2123, 1.2253

Support: 1.1765, 1.1647, 1.1366

XAUUSD (4-Hour Chart)

The XAUUSD rallied on Tuesday, recovering after Monday’s slide. The gold price has almost reversed the previous day’s losses, having captured the $1750 mark amid a renewed sell-off in the US Dollar across its main rivals. Earlier on Tuesday, the three-day coronavirus lockdown-induced protests across China eased. Chinese equity markets rebounded firmly on expectations that the government will further relax its zero-Covid policy after the weekend protests. China’s authorities announced new property market measures while Global Times tweets suggested that the government could do away with its stringent zero-Covid policy sooner. These developments from China improved the market risk sentiment and triggered a sharp retreat in the safe-haven greenback, which, in turn, boosted the dollar-denominated gold. Nevertheless,  the further recovery in Gold prices could be capped by the buoyant tone seen around the US Treasury bond yields, which recovered sharply on Monday after the hawkish commentary from the US Federal Reserve officials.

From the technical perspective, the four-hour scale RSI indicator recovered to neutral level 48 figured as of writing, suggesting that the gold has not made a decisive move. As for the Bollinger Bands, the pair was fluctuating around the 20-period moving average, signalling that the yellow metal would get into a consolidation phase ahead of any surprising event.

Resistance: 1785, 1800

Support: 1740, 1704, 1671