Daily Technical Insights 26 January 2023

　　

EURUSD (4-Hour Chart)

EUR/USD edged lower on Wednesday as cautious market sentiment helps the US dollar index hold its ground. At the time of writing, EUR/USD stays marginally below 1.0900, trading at 1.0867.  The US dollar index holds around 102. The IFO index from Germany on Wednesday showed that business sentiment improved modestly in January but failed to help the pair. The IFO index rose to 90.2, up from 88.6 in December, aligning with the forecast of 90.2. For more price action, eye on the release of the United States Gross Domestic Product (GDP) data and the Initial Jobless Claims on Thursday, which will directly influence the financial market.

For the technical aspect, RSI indicator 51 figures as of writing. The RSI indicator maintains neutral in the near term, signaling that the market is lack main traction. As for the Bolling  Bands, the price holds above the upward-moving average. The upward momentum seems weak as the pair trades in a narrow range in the near term. In conclusion, we think EUR/USD is in consolidation mode based on the technical analysis. The price is lack main traction. Market participants now await a key event on Thursday, which will act as a price catalyst, pushing the financial market. For the uptrend scenario, the pair need a breakthrough above the current resistance at 1.0912 to confirm the further uptrend. For the downtrend scenario, if the price drop below the support at 1.0780, it may lose its upward momentum and head to test the next support at 1.0710.

Resistance:  1.0912, 1.1048, 1.1131

Support: 1.0780, 1.0710, 1.0582

GBPUSD (4-Hour Chart)

GBP/USD trades in a narrow range around 1.2300 on Wednesday. In the absence of major macroeconomic data releases, the cautious market sentiment helps the US dollar index hold its ground and keeps the financial market non-volatile for now. On the other hand,  the various stimulus and energy payments have led to a record deficit in the UK but failed to solve the British workers’ problem, which sends more negative signals for GBP/USD. Market participants await the release of the US Gross Domestic Product (GDP) for the fourth quarter (Q4) and the Initial Jobless Claims on Thursday which will let market participants better understand the current market and trigger more price action.

For the technical aspect, RSI indicator 47 figures as of writing, still holding around the neutral region, signaling no main traction. As for the Bolling  Bands, the price trades between the moving average and lower band, suggesting that the is a lack of direction in the near term. In conclusion, we think GBP/USD may continue on consolidation until further breakthrough. For the uptrend scenario, the pair is establishing itself above the current support at 1.2273. It must not drop below the current support for any following upward movement. For the downtrend scenario, if the price drop below the support at 1.2273, it may stage more downward correction.

Resistance: 1.2430, 1.2600

Support: 1.2273,  1.2161, 1.2021

XAUUSD (4-Hour Chart)

Gold prices fell despite the weak US Dollar and falling US Treasury bond yields. Technical moves or near-term profit-taking could be the main reason. In the meantime, the US economic calendar would be busy on Thursday, led by US Gross Domestic Product (GDP) for the fourth quarter (Q4), expected at 2.6%. Further, Durable Good Orders are expected at 2.5%, compared to -2.1% of the previous. Initial Jobless Claims for the last week would also be updated, expected 205K, compared to 190K previous.

For the technical aspect, RSI indicator 51 figures as of writing, moving marginally around mid-line, signaling the lack of price movement. For the Bollinger Bands, the price is moving up and down between the upper band and the lower band, suggesting that the pair is lack traction. In conclusion, we think the market is in consolidation mode ahead of US key event on Thursday. The market needs a decisive breakthrough to confirm the following trend as  Gold price is trading between a narrow range. For the uptrend scenario, the next resistance is at $1,952. If the price breakthrough the resistance, it may head to test the next resistance at $1,977. For the downtrend scenario, if the price drop below $1,920, it may change its current trend and head to test the pivotal round figure mark at $1,900.

Resistance: 1952, 1977

Support: 1920, 1900, 1873