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Daily Technical Insights 9 February 2023


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

EURUSD (4-Hour Chart)

The EURUSD erased daily gains and was trading below 1.0730 as of writing. The EUR/USD pair hover around 1.0740 on Wednesday, consolidating after Tuesday’s Federal Reserve (Fed) chief Jerome Powell turmoil in markets. The head of the American central bank participated in a moderated discussion at the Economic Club of Washington, DC, providing some interesting headlines. The macroeconomic calendar has no relevant data scheduled for today. A couple of Federal Reserve officials are scheduled to speak during the American afternoon.

From the technical perspective, the four-hour scale RSI indicator climbed to 42 as of writing, suggesting that the pair’s negative traction has weakened. As for the Bollinger Bands, the pair continued to wander below the 20-period moving average, showing that the EURUSD remained defensive at the moment of writing.

Resistance: 1.0930, 1.1025

Support: 1.0664, 1.0508

GBPUSD (4-Hour Chart)

The GBPUSD has failed to stabilize above 1.2100 and erased a portion of its daily gains. The US Dollar preserves its strength amid the souring market sentiment and makes it difficult for the pair to gather recovery momentum. Late Tuesday, FOMC Chairman Jerome Powell also acknowledged the strong labor market data and reiterated that they will probably need to do further rate hikes. In an optimistic tone, Powell said that he was expecting 2023 to be “a year of the significant decline in inflation.” This comment made it difficult for the US Dollar Index to preserve its bullish momentum and helped GBP/USD erase some of this week’s losses. Currently, the CME Group FedWatch Tool shows that markets are pricing in a 68% probability of the Fed opting for two more 25 basis points rate increases in March and May. The market positioning is unlikely to change significantly ahead of next week’s inflation report.

From the technical perspective, the four-hour scale RSI indicator recovered to 46 at the moment of writing, suggesting that the pair now have no decisive direction. As for the Bollinger Bands, the pair was breaking through the 20-period moving average to the upper area and the size between the upper and lower bands got smaller, signaling that the pair was within the consolidation phase.

Resistance: 1.2264, 1.2391, 1.2492

Support: 1.1924, 1.1859

XAUUSD (4-Hour Chart)

Gold price stays around $1,870, unable to gain traction on Wednesday amid the absence of a fresh catalyst. Market participants lack of consensus so far from US Federal Reserve (Fed) Chair Jerome Powell’s speech on Tuesday. Powell repeated that they were determined to control inflation and would continue tightening the monetary policy by hiking rates. On the other hand, he also stated that the disinflationary process has begun. At the time of writing, the Gold price is trading at $1,877.26, posting a 0.3% gain daily. The US dollar index rose 0.03% to 103.370 and the benchmark US 10 Year Treasury Yield declined 0.65% to 3.653, having no clear traction on Gold price.

For the technical aspect, RSI indicator 43 figures as of writing, signaling no clear traction as the RSI indicator has no significant movement in the near term. As for the Bollinger Bands, the price is holding around the downward moving average. The bearish trend could persist. In conclusion, we think the market is in modest bearish mode though both indicators show no strong bearish potential. The downtrend from last week should persist until further breakthrough. For the downtrend scenario, the price is currently holding above support at  $1,860. 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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