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Daily Technical Insights 4 May 2023


Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.

EUR/USD (4 Hours)

The EUR/USD pair reached a high of 1.1091 after the Federal Reserve raised interest rates to 5.00-5.25%, the highest since 2007. However, the dollar then recovered as the Fed signaled a potential pause in further tightening. Data released on Wednesday showed the Euro area’s unemployment rate unexpectedly dropped to 6.5%. The European Central Bank (ECB) meeting, where a 25 basis points interest rate hike is expected, will likely overshadow upcoming data releases, including the final readings of the HCOB Services and Composite PMI and the Euro area’s March Producer Price Index.

Following the ECB meeting, attention will shift to the US Non-Farm Payrolls (NFP) on Friday. The ADP Employment report showed an increase in private payrolls of 296,000 in April, surpassing expectations. Q1 Unit Labor Costs and the weekly Jobless Claims are also due on Thursday.

Based on technical analysis, the EUR/USD pair is continuing to move higher and has been able to break above the 1.1000 level, with an attempt to reach the 1.1100 level. Currently, the price has moved higher, pushing the upper band of the Bollinger band to a higher level. It is anticipated that the EUR/USD will reach the resistance level at 1.1095. The Relative Strength Index (RSI) is currently at 66, indicating that the market is bullish on the EUR/USD.

Resistance: 1.1095, 1.1129

Support: 1.1054, 1.1018

XAU/USD (4 Hours)

Gold (XAU/USD) prices continued to climb, reaching $2,026.80 per troy ounce, as the US dollar weakened ahead of the Federal Reserve’s monetary policy announcement. The US reported positive job creation numbers with the private sector adding 296,000 new positions in April, double the market’s expectations, and the ISM Services PMI printing at 51.9 in April, higher than anticipated. However, the S&P Global downwardly revised the US Services PMI and Composite PMI. Wall Street remains in wait-and-see mode, with the three major indexes in the green, while Treasury yields retreat for the second day, adding pressure on the US dollar. Analysts expect the Fed to hike rates by 25 basis points and signal a pause in its tightening cycle, but most anticipate Chairman Jerome Powell to leave the door open for additional tightening depending on macroeconomic data.

The technical analysis suggests that XAU/USD is showing signs of moving lower after reaching a high of $2,084. The price is currently inside the Bollinger Band and below the upper band, indicating the potential for a downward movement. Additionally, the Relative Strength Index (RSI) is currently above 70, indicating that XAU/USD is overbought.

Resistance: $2,068, $2,058

Support: $2,033, $2,020

Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.