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Daily Technical Insights 6 December 2022


EURUSD (4-Hour Chart)

The Euro Dollar pair witnessed a turbulent trading session on December 2nd. The U.S. nonfarm payrolls for November came in at 263K, above market expectations of 200K. The rather hot payrolls print induced a sell-off in U.S. equity markets and raised interest rate expectations, despite Fed Chair Jerome Powell’s dovish tone on December 1st. On the other hand, Euro bulls have continued to take advantage of the recent Dollar pullback. The surprising dovish signal released by Fed Chair Jerome Powell has continued to put downward pressure on the Dollar. The ECB is expected to hike rates by 50 basis points for December. On the economic docket, ECB president Lagarde is scheduled to speak on the 8th and the 9th.

On the technical side, EURUSD has hit its short-term resistance of 1.06. Short-term support for the pair rests at around 1.035. The 76.4% Fibonacci retracement level of 1.0391 sets another short-term support for EURUSD. RSI for the pair sits at 54.22, as of writing. On the four-hour chart, EURUSD currently trades above its 50, 100, and 200-day SMA.

Resistance: 1.06

Support: 1.0391, 1.035

GBPUSD (4-Hour Chart)

GBPUSD snapped its three-day winning streak on the first trading day of the week. The Dollar index’s drop below 105 induced dip buying, which buoyed the U.S. Dollar on the first trading day of the week. U.K. PMI data, released during the European trading session, came in at 48.2, lower than market expectations of 48.3. The lower-than-expected U.K. PMI data has deterred any momentum for Pound bulls. On the economic docket, there are no impactful economic data releases from the U.K. this week. The U.S. will release initial jobless claims and PPI figures on Thursday and Friday, respectively.

On the technical side, GBPUSD has hit its short-term resistance at 1.225. Near-term support for Cable sits at 1.15 and 1.091. The 23.6% Fibonacci retracement also indicates short-term support for Cable. RSI for the pair sits at 49.69, as of writing. On the four-hour chart, GBPUSD currently trades below its 50-day SMA, but above its 100 and 200-day SMA.

Resistance: 1.2400, 1.2600

Support: 1.2154, 1.1927, 1.1765

XAUUSD (4-Hour Chart)

Gold extends its losses from last Friday after the U.S. nonfarm payroll data was released. The higher-than-expected nonfarm payrolls figure immediately sparked a rise in the Dollar index and a drop in the Dollar-denominated Gold. Despite market participants expecting a pivot from the Fed, Fed Chair Jerome Powell continues to reiterate that inflation continues to pose a threat to price stability and it is ultimately the central bank’s goal to bring inflation back down to the 2% mark. However, Fed Chair Jerome Powell’s statement regarding a possible “soft landing” of the economy, still instilled optimism across markets. Gold’s drop throughout today’s trading is mainly due to the higher-than-expected PMI data and the resulting stronger Dollar.

On the technical side, XAUUSD has reversed course from its short-term resistance level of around $1800 per ounce. Short-term support for the yellow metal sits at around the $1740 per ounce price region. RSI for Gold sits at 59.63, as of writing. On the four-hour chart, XAUUSD currently trades above its 50, 100, and 200-day SMA.

Resistance: 1814

Support: 1740, 1706, 1671