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Daily Technical Insights 24 February 2023


EURUSD (4-Hour Chart)

The EURUSD extended its bearish tendency and was trading below the 1.0600 level as of writing, under pressure since the day started. The US Dollar continued to strengthen on the back of hawkish US Federal Reserve (Fed) prospects. The Federal Open Market Committee (FOMC) Meeting Minutes released on Wednesday is more hawkish than anticipated, which showed that a few members would have preferred a 50 bps hike and that participants believe the continued tight job market would contribute upward pressure to inflation. The news boosted demand for the US Dollar as stock markets turned south. In Eurozone, the final estimate of the January Harmonized Index of Consumer Price (HICP), was confirmed at 8.6% YoY. However, the core reading was upwardly revised to 5.3% from a preliminary estimate of 5.2%.

From the technical perspective, the four-hour scale RSI indicator hovered just above the oversold zone, suggesting the pair was pressured by heavy bearish traction. As for the Bollinger Bands, the pair was moving along with the lower, trying to find support in the lower band, but the size between the upper and lower bands get larger, showing the downside tendency has a high chance to persist shortly.

Resistance: 1.0788, 1.0929

Support: 1.0508, 1.0401

XAUUSD (4-Hour Chart)

Gold price maintains under bearish pressure on Thursday as risk aversion continued underpinning the US Dollar. Gold price keeps edging lower in the course of trading and hit the lowest $1,817.58 in the US session, while the US dollar advanced on the back of hawkish FOMC Meeting Minutes. On the other hand, inflationary pressures in the same period were higher than previously estimated. Personal Consumption Expenditure Prices rose by 3.7% QoQ, higher than the 3.2% expected, while the core reading came in at 4.3% higher than the 3.9% from the third quarter of 2022. The figures fueled speculation that the US Federal Reserve will hike rates further in the upcoming meetings.

For the technical aspect, RSI indicator 36 figures as of writing, maintaining in sell region as Gold price is still under a bearish trend. As for the Bollinger Bands, the price is moving down along with the lower band. This and the downward moving average signal some bearish potential. A continued downtrend could be expected. In conclusion, we think the market is in bearish mode as both indicators show bearish potential. We believe the downtrend would persist. For the downtrend scenario, the price is holding at $1,820. If the price close below the level, it may head to test the crucial support at the round-figure mark of $1,800.

Resistance: 1850, 1870, 1900

Support: 1820, 1800