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Daily Technical Insights 23 March 2023


EURUSD (4-Hour Chart)

On Wednesday, the EUR/USD pair continued to rise for the fifth consecutive session, nearing the 1.0800 area prior to the US session and posting a daily gain of 0.18%. This rise was mainly due to the weaker US Dollar, as US Treasury bond yields experienced a sharp decline. The markets are expecting the Federal Reserve to announce a 0.25% hike in the Fed Funds Rate to a target range of 4.75%-5.00% during the meeting. However, traders believe that the Fed cannot be as aggressive as it would like to be due to the international banking crisis triggered by the collapse of Silicon Valley Bank. In the Eurozone, the European Central Bank President, Christine Lagarde, has pledged to bring down inflation, as there is no clear evidence that underlying inflation is trending downwards.

From a technical standpoint, the RSI indicator stands at 80, indicating that the bulls are in control, as the RSI is entering the overbought zone. The price has maintained its upward momentum and moved alongside the upper Bollinger Band, suggesting that the upside trend may continue. Overall, we expect the market to remain bullish as the pair tests the 1.0903 resistance level. However, there may be a downward correction in the near term before the pair climbs higher.

Resistance: 1.0903, 1.0962

Support: 1.0798, 1.0735

XAUUSD (4-Hour Chart)

On Wednesday, XAUUSD stabilized around $1,940 ahead of the Federal Reserve’s rate-setting meeting, while Wall Street’s main indexes struggled for direction due to uncertainty in the banking sector. Traders have lowered their expectations for the interest rate hike to 25 basis points, citing concerns about liquidity in the banking sector and the Fed’s aggressive monetary tightening over the past year as reasons for the crisis. At the time of writing, the price of gold is trading at $1,948.70.

From a technical perspective, the 20-period moving average at $1,964 is currently providing support for the market. If this level is breached, we could see further weakness toward the recent range low at $1,933. On the other hand, if gold breaks above the recent retest of $1,985, it could gain further upside momentum to reach above the $2,000 level.

Resistance: 1985, 2010

Support: 1933, 1898