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Daily Technical Insights 5 April 2023


Technical Analysis

EURUSD (4-Hour Chart)

Recent data from the United States has raised concerns about the labor market, as job openings reported in the JOLTs report dropped by 32,000 in February. This, along with the second consecutive month of declining Factory Orders, may indicate a cooling labor market. More data will be revealed later in the week with ADP Employment figures, Initial Jobless Claims, and the US Nonfarm Payrolls report. Investors are now expecting a possible pause in the tightening cycle of the US Fed at its May 2-3 meeting, with a 57% probability of a Fed pause.

Chart EURUSD by TradingView

The EUR/USD pair has risen above 1.0900 for the second consecutive day, reaching a daily high of 1.0973, supported by broad US Dollar weakness. The pair shows a triple bottom pattern on the daily chart, indicating a potential upward trend with a target of 1.1000. The next resistance levels to watch are 1.0973, 1.1000, and the year-to-date high at 1.1033. On the downside, support levels are at 1.0900 and the 20-day EMA at 1.0788. The EUR/USD pair remains bullish with further upside potential.

Resistance levels: 1.1000, 1.1034

Support levels: 1.0900, 1.0788

XAUUSD (4-Hour Chart)

As of Tuesday’s European session, the price of gold is experiencing slight losses at around $1,980, consolidating the losses from the beginning of the week. The precious metal has been negatively affected by the recent strengthening of the US Dollar and a pessimistic geopolitical headline during a sluggish Asian session. However, the price rallied earlier in the day and touched its highest level in over a year above $2,025 after the release of disappointing US Factory Orders and US JOLTS Job Openings in February. The US Dollar Index is experiencing slight gains around 102.20 after a significant fall on Monday, the largest since March 22. Looking ahead, Gold traders may be interested in the US Factory Orders for February, which are expected to be -0.5% compared to -1.6% previously.

Chart XAUUSD by TradingView

The recent drop in Gold prices from a descending resistance line, hovering around $1,990, could result in further decline towards the $1,968 level. If the price falls below this level, it could reach $1,930 and $1,900. However, a rise above $1,990 is necessary to confirm the buyers’ control. Although the $2,000 level and an upward-sloping resistance line at $2,027 could be a significant challenge for the Gold bulls. Nonetheless, Gold prices are expected to stay stable in the long run, but a short-term pullback cannot be dismissed. The RSI sits at 67.

Resistance: 1996, 2027, 2050

Support: 1960, 1950, 1937