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Daily Technical Insights 12 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 Drops to One-Month Low Amid Stronger US Dollar and Deteriorating Market Sentimen

The EUR/USD pair is heading towards its lowest daily close in a month due to a stronger US Dollar and worsening market sentiment. The pair has retreated from near 1.1100 and briefly dipped below 1.0900. The European Central Bank (ECB) Vice President, Luis de Guindos, expressed concerns about service and core inflation but did not provide any commitment on rates, while Joachim Nagel mentioned that decisions would be made on a meeting-by-meeting basis. Risk aversion benefited the US Dollar, and government bond yields rebounded during the American session.

US data indicated a slowdown in inflation and an increase in the labor market, with Initial Jobless Claims reaching the highest level since October 2021. Market sentiment will continue to be the main driver, and if concerns persist, the EUR/USD pair may experience further losses, contributing to increased volatility.

Chart EURUSD by TradingView

According to technical analysis, the EUR/USD pair is currently trending lower after reached the lower band of the Bollinger band. It is expected that the EUR/USD will continue to move lower and push the lower band. The Relative Strength Index (RSI) is presently at 37, suggesting a lower trend in the EUR/USD market.

Resistance: 1.0950, 1.0986

Support: 1.0911, 1.0881

XAU/USD (4 Hours)

Gold (XAU/USD)Prices Plunge on Surge in US Dollar and Market Sell-Off Amidst Banking Issues and US Debt Ceiling Concerns

Gold (XAU/USD)prices experienced a sharp decline on Thursday, hitting a new weekly low of $2,011.09, due to a surge in the US dollar amid a persistent dismal mood, resulting in a sell-off in the stock markets. The mood was impacted by banking issues, as the FDIC proposed extra fees for large banks to cover the $16 billion lost on the rescue of Silicon Valley Bank and Signature Bank in March. Furthermore, concerns around the US debt ceiling continued to undermine the sentiment, as Republican lawmakers are reluctant to back President Joe Biden’s plan. Additionally, government bond yields remain depressed, with the 10-year Treasury note yields at 3.38%, down 5 basis points, and the 2-year note offers at 3.86%, shedding 3 bps, due to the easing of inflation-related figures in April, as the PPI increased by 2.3% YoY.

Chart XAUUSD by TradingView

The technical analysis indicates that XAU/USD is moving lower on Thursday. The price is currently pushing the lower band of the Bollinger Band, indicating the potential for a slight lower movement for XAU/USD. Moreover, the Relative Strength Index (RSI) is currently at 38, indicating that XAU/USD is considered in bearish trend.

Resistance: $2,023, $2,036

Support: $2,010, $2,000

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