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Daily Technical Insights 14 April 2023


EUR/USD (4 Hours)

The EUR/USD currency pair is rising due to support from both currencies after a period of consolidation below 1.1050 in the Asian session. The US Dollar is facing pressure as the market expects the Federal Reserve (Fed) to act on inflation sooner than anticipated after the softening of the US Producer Price Index (PPI). The S&P500 futures indicate cautious market sentiment despite bullish activity on Thursday. The Euro is gaining strength as investors debate the scale of a potential interest rate hike by the European Central Bank (ECB), with options of 25 and 50 basis points being considered for the May policy meeting. ECB Governing Council member Bostjan Vasle noted concerns over core inflation continuing to move in the wrong direction.

Looking at the technical analysis, the EUR/USD price has been increasing but there are indications of easing, as seen from the Bollinger band where the lower band is becoming narrower. Our support level has been adjusted to 1.1031, as the market is expected to consolidate for today, despite the release of US retail sales. The RSI has entered the overbought level, which suggests there may be limited higher movement potential.

Resistance: 1.1076, 1.1136

Support: 1.1031, 1.0977

XAU/USD (4 Hours)

Gold prices rose to their highest level since March 2022, reaching $2,048.67 per troy ounce on Thursday, despite an optimistic market outlook. This was due to speculation that the US economy would avoid a severe contraction if the Federal Reserve (Fed) ends its tightening cycle. The Producer Price Index (PPI) in the US declined 0.5% month-on-month in March, which was lower than expected, and annual readings also fell. This news caused the US dollar to fall and stock indexes to rise. The weekly unemployment claims also rose, indicating a weaker labor market. The Nasdaq Composite was up 1.57%, while the Dow Jones Industrial Average and S&P500 also saw gains. The 10-year Treasury note yields remained unchanged at 3.42%, while the 2-year note yields decreased by 3 basis points.

Looking at the technical analysis, the XAU/USD price is still increasing and attempting to surpass the upper band of the Bollinger band. There is currently a high demand for gold in the market due to the release of some weak US data. We have adjusted our key support level to $2,039, which was previously a resistance level. The RSI is entering the overbought level, which suggests a potential correction lower today, particularly since it is the end of the week.

Resistance: $2,053, $2,068

Support: $2,039, $2,020