Daily Technical Insights 22 February 2023

　　

GBPUSD (4-Hour Chart)

The GBPUSD lost upside traction and hover around the 1.21000 level as of writing, as the stronger-than-expected PMI data from the US provided a boost to the US dollar and limit the pair’s upside. The monthly data published by S&P Global showed on Tuesday that Composite PMI in early February jumped to 53 from 48.5 in January. Manufacturing PNI came in at 49.2 to beat the market expectation of 46.8 and Services PMI climbed to 53.3 from 48.7. With the UK private sector holding resilient in the face of strong inflation, the Bank of England is likely to continue to raise its policy rate without worrying about a deep recession.

From the technical perspective, the four-hour scale RSI indicator figured 58 as of writing, suggesting that the pair was surrounded by bullish momentum. As for the Bollinger Bands, the pair was priced above the 20-period moving average and limited by the upper band, showing the pair currently was more favored to the positive path in the near term. Once the bulls break the upper band, the next stop would be the 1.2210 level.

Resistance: 1.2211, 1.2400

Support: 1.2012, 1.1935, 1.1859

XAUUSD (4-Hour Chart)

Gold price remains under pressure on Tuesday as the benchmark US 10-Year Treasury rose 2.97% to 3.956, capping any further gains on Gold price. At the time of writing, the Gold price is trading at $1835.10, posting a 0.46% loss daily. On the other hand, investors keep their eyes on geopolitical tensions. The recent visit of US President Joe Biden to Ukraine led Russia to suspend its nuclear arms treaty with the United States. Russian President Vladimir Putin also vowed to continue the military campaign in Ukraine. Worrying about geopolitical tension could directly influence the risk sentiment, and provide a fresh catalyst to Gold prices.

For the technical aspect, RSI indicator 43 figures as of writing, holding around mid-line as the price is amid a consolidation phase in the near term. As for the Bollinger Bands, the price moves up and down around the moving average. The price needs a decisive breakthrough to trigger some following traction. In conclusion, we think the market is under a modest bearish trend as the price is edging lower and weighed by upbeat US Treasury yield, though both indicators show no strong bearish potential. For the downtrend scenario, the next support level is at $1,820. If the price close below the level, it may trigger some technical selling and drag the price deeper.

Resistance: 1870, 1900, 1920

Support: 1820, 1800