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Daily Technical Insights 21 February 2023


EURUSD (4-Hour Chart)

The EURUSD advanced toward the 1.0690 level in the second half of Monday and managed to erase its losses. As trading action turns subdued with US markets remaining closed in observance of Presidents’ Day, the pair could find it difficult to gather directional momentum. The US Dollar started the week advancing against most major rivals as geopolitical headlines took over the weekend. However, the EURUSD pair is confined to a tight 30 pips range since the market opened. A scarce macroeconomic calendar and a holiday in the US will limit volatility until Tuesday’s Asian opening. The Eurozone published December Construction Output, which contracted 1.3% YoY and 2.5% MoM, worse than anticipated.

From a technical perspective, the four-hour scale RSI indicator remained flat in the neutral region, suggesting that the pair currently lack of catalyst to make a decisive move. As for the Bollinger Bands, the pair continued to move along with the 20-period moving average. We think the EURUSD would move in a small range from 1.0650 to 1.0700 until there is any unanticipated event to fuel the market mood.

Resistance: 1.0794, 1.1022

Support: 1.0634, 1.0505

XAUUSD (4-Hour Chart)

The XAUUSD consolidate Friday’s gains, moving slightly in a narrow range around the $1840 mark as United States markets are closed amid President’s Day holiday. The financial markets are trying to digest the latest US Federal Reserve officials’ hawkish messages. Hopes for a soon-to-come pivot in monetary policy have faded ever since the year started, with the terminal rate now expected above 5%. Apart from this, tensions between the US and China over the balloons shots earlier this month continue as US top diplomat Anthony Blinken said Beijing’s actions were irresponsible, while Chinese officials responded US reaction was “hysterical.” Meanwhile, North Korea fired an intercontinental ballistic missile on Saturday that landed in the Sea of Japan. Finally, US President Joe Biden arrived in Ukraine in a surprise visit to Kyiv to announce additional weapons supplies. The mounting geopolitical crisis may provide a boost for the safe-haven gold.

From a technical perspective, the four-hour scale RSI indicator little changed on Monday, staying in the neutral area, which suggests that the pair currently failed to gather directional momentum. As for the Bollinger Bands, the pair was pricing stably above the 20-period moving average, showing the pair is more favored to the upside path in the near term.

Resistance: 1870, 1900, 1920

Support: 1820, 1800