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Daily Technical Insights 10 May 2023


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

EUR/USD (4 Hours)

EUR/USD Extends Decline as US Dollar Strengthens Ahead of Crucial Data

The EUR/USD currency pair continued to retreat on Tuesday, falling below 1.1000 and extending its decline from monthly highs. Despite hawkish comments from European Central Bank (ECB) members, the Euro underperformed, while the US Dollar gained strength supported by higher US Treasury yields in anticipation of important data releases. ECB members, including Martins Kazaks and Peter Kazimir, spoke about the possibility of further rate hikes, while Isabel Schnabel highlighted the need for more efforts to bring inflation back to target. Mario Centeno is also scheduled to speak on Wednesday. The Euro remained the weakest currency among the G10 currencies. The market focus now turns to the upcoming US April Consumer Price Index (CPI), which is expected to show an acceleration in headline inflation and could influence the Federal Reserve’s monetary policy expectations. The ongoing debt ceiling issue is also gaining attention, adding to market uncertainty.

According to technical analysis, the EUR/USD pair is currently trending lower, reaching the lower band of the Bollinger band. It is expected that the EUR/USD will continue to move back lower but need to move slightly higher to reach the middle band of the Bollinger band. The Relative Strength Index (RSI) is presently at 42, suggesting a neutral trend but lower in the EUR/USD market.

Resistance: 1.0990, 1.1032

Support: 1.0965, 1.0939

XAU/USD (4 Hours)

XAU/USD Consolidates as Risk-Aversion Persists, US Dollar Gains Ground

Gold (XAU/USD) remained consolidated around $2,030 per troy ounce as risk aversion persisted, driving demand for both gold and the US Dollar. The US Dollar gained strength against other currencies, supported by concerns about the banking system’s health and the release of the Federal Reserve’s Senior Loan Officer Opinion Survey, which showed tightened lending standards and weakened credit demand in the US. Wall Street closed in the red, reflecting the negative market sentiment. Traders are now focused on the upcoming release of the April Consumer Price Index (CPI), with expectations of a 5% annualized increase in inflation. A lower-than-expected CPI could fuel speculation of a potential rate cut by the Federal Reserve.

The technical analysis indicates that XAU/USD is moving higher on Monday. The price is currently just above the middle band of the Bollinger Band, indicating the potential for a consolidating movement with higher potential. Moreover, the Relative Strength Index (RSI) is currently at 56, meaning that XAU/USD is considered neutral but slightly bullish.

Resistance: $2,038, $2,052

Support: $2,015, $2,003

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