EURUSD (4-Hour Chart)
The EUR/USD pair edged higher on Monday, failing to preserve its upside momentum, and retreated towards the 1.0870 mark as the upbeat sentiment data from the Eurozone helps the Euro stay resilient against its rivals. The pair is now trading at 1.0870, posting a 0.04% gain daily. EUR/USD stays in the positive territory despite a stronger US Dollar across the board, as investors are preparing for the US Federal Reserve Open Market Committee (FOMC) meeting that will begin on Tuesday. The markets have been pricing in a greater chance of a 25 basis points (bps) rate hike amid signs of easing inflationary pressures in the US, which might weigh on the greenback and lend support to the EUR/USD pair. In the Eurozone, the Euro area Economic Sentiment Indicator improves at a stronger pace to 99.9 in January, which acted as a tailwind for the shared currency Euro. Meanwhile, the hopes of stronger rate hikes from the ECB remain amid receding hawkish bias from the Fed.
For the technical aspect, RSI indicator 47 figures as of writing, suggesting that the pair could witness heavy bearish momentum as the RSI is falling sharply below the mid-line. As for the Bollinger Bands, the price declined sharply and dropped below the moving average, therefore the downside traction should persist. In conclusion, we think the market will be bearish as the pair is heading to test the 1.0858 support level. On the upside, the pair could gain bullish momentum once above the 1.0919 resistance.
Resistance: 1.0919, 1.1032
Support: 1.0858, 1.0807, 1.0779
GBPUSD (4-Hour Chart)
GBP/USD struggles to hold above 1.2400. In the second half of Monday, the pair witnessed some bearish traction and fell below 1.224. The market sentiment ahead of key events this week seems to support the US dollar index and therefore exert pressure on its rivals. The pair is now trading at 1.2368, posting a 0.22% loss daily. Meanwhile, the US dollar index holds above 102 level, now at 102.18, and the benchmark 10-year US Treasury bond yield rises 1% to above 3.5%, making it difficult for GBP/USD to gain upside traction.
For the technical aspect, RSI indicator 47 figures as of writing, failing to provide a directional clue as the RSI indicator maintains around mid-line without significant movement. As for the Bollinger Bands, the price is moving up and down around the horizontal moving average, signaling that the pair is lack main traction. In conclusion, we think the market is in consolidation mode until there is a decisive breakthrough to trigger follow-through buying or selling. For the uptrend scenario, the price needs a firm break above resistance at 1.2426 to show bullish impetus. For the downtrend scenario, if the price drop below the support at 1.2341, it may trigger some technical selling and drag the GBP/USD pair further toward the next support at 1.2292.
Resistance: 1.2426, 1.2493, 1.2593
Support: 1.2341, 1.2292, 1.2188
XAUUSD (4-Hour Chart)
The gold price has lost its upside traction and fell toward $1,920 after having advanced above $1,930 in the European trading session. The market sentiment ahead of key events this week seems to support the US dollar index. Meanwhile, the benchmark 10-year US Treasury bond yield rose 1% to above 3.5%, making it difficult for Gold prices to gain upside traction. At the time of writing, the Gold price is trading at $1,923, posting a 0.23% loss daily.
For the technical aspect, RSI indicator 44 figures as of writing, close to mid-line, failing to provide a directional clue as the RSI indicator keeps moving up and down around mid-line for a while. As for the Bollinger Bands, the price keeps edging below the horizontal moving average, signaling that the pair is turning weak from the latest uptrend. In conclusion, we think the market is in modest bearish mode since both indicators show the uncertainty of traction. Besides, we can see the price keeps edging lower and testing support at $1922. For the downtrend scenario, a convincing break below the support at $1922 may trigger some technical selling and drag the Gold price back toward the $1,900 round-figure mark. For the uptrend scenario, the pair should establish itself above the current support at $1922 first. To regather bullish strength, it should also recover the lost territory from the multi-month high around the $1,949 zone, which has become a strong barrier in the near term for bulls.
Resistance: 1947, 1957, 1963
Support: 1922, 1900, 1873