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Daily Technical Insights 8 February 2023


Stay ahead of the game with today’s trading insights brought to you by the expert team at vtmarkets.com.

EURUSD (4-Hour Chart)

The EURUSD has lost its traction and dropped to its lowest level in nearly a month below 1.0700 following a quiet European morning. Ahead of FOMC Chairman Jerome Powell’s speech, the US Dollar preserves its strength on hawkish Fedspeak and weighs on the pair. The EURUSD pair extended its slide to a fresh three-week low at 1.0969, as demand for the US Dollar prevails ahead of the United State Federal Reserve (Fed) President Jerome Powell’s speech. Market participants are still pricing in the latest central bank decisions and the solid employment report published last Friday, both suggesting the Federal Reserve would maintain the tightening course. Chair Powell is due to participate in a moderated discussion at the Economic Club of Washington DC after Wall Street’s opening and may provide a clue about monetary policy.

From a technical perspective, the four-hour scale RSI indicator remained around the 30 levels, suggesting that the pair were surrounded by heavy bearish pressure and investors should be aware of any sign of a dramatic rebound. As for the Bollinger Bands, the pair kept pricing at the lower area, but the size between the upper and lower bands got lower, which indicates that the pair’s downside momentum has been slowdown. We think the pair is more favored for the downside path in the short term, but a critical rebound is not far away.

Resistance: 1.0747, 1.0930, 1.1022

Support: 1.0661, 1.0508

GBPUSD (4-Hour Chart)

The GBPUSD managed to rebound above the 1.2000 level at the moment of writing, erasing its most daily losses. As investors await FOMC Chairman Jerome Powell’s speech, the US Dollar was moving in a volatile path and struggling to preserve its strength as of writing. However, it is too early to say whether Pound Sterling is out of the woods as investors are unlikely to bet on an extended recovery ahead of FOMC Chairman Jerome Powell’s highly-anticipated speech. In the Eurozone, news of EU and UK negotiators have made a breakthrough in the Nothern Ireland Protocol helped Pound Sterling stay resilient against its rivals. Additionally, Bank of England (BoE) Chief Economist Huw Pill noted that they were ready to do more to get inflation back to target, providing a boost for the GBPUSD pair.

From a technical perspective, the four-hour scale RSI indicator rebounded to 33 as of writing, suggesting that the pair was amid strong recovery strength. As for the Bollinger Bands, the pair was pricing below the 20-period moving average and the gap size became smaller, which is a sign that the pair’s negative traction has been softer. The pair now is waiting for a critical move to decide the near-future direction.

Resistance: 1.2265, 1.2397, 1.2492

Support: 1.1927, 1.1854

XAUUSD (4-Hour Chart)

Gold prices were volatile on US Federal Reserve (Fed) Chairman Jerome Powell’s speech. Earlier, the Gold price surged to its highest $1,884.37, and pullback from then as the US dollar regather strength. Federal Reserve Chair Jerome Powell on Tuesday reiterated that continued interest-rate increases will be appropriate and that the “disinflationary process” has begun. The gold prices rose following Powell’s comments that inflation was on the decline. Aftermarket participants reassess the comments and the US dollar regathers strength and Gold price pullback. At the time of writing, the Gold price is trading at $1,872.82, posting a 0.25% gain daily.

For the technical aspect, RSI indicator 39 figures as of writing, slightly holding above the 30 lines as the price established itself above $1,860  from the sharp decline last week. As for the Bollinger Bands, the price is moving between the downward moving average and the lower band. The bearish trend could persist. In conclusion, we think the market is in bearish mode as both indicators show bearish potential. For the downtrend scenario, the price is currently holding above support at  $1,860, which seems unstable for now. If the price drops below the current support, it may trigger some technical selling and drag the price deeper. For the uptrend scenario, the price must hold above $1,860 and break through the resistance at the round-figure mark of $1,900 to confirm the uptrend.

Resistance: 1900, 1920, 1957

Support: 1860, 1830, 1800

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