• CL-OIL


  • Cocoa-C


  • View more

Daily Technical Insights 18 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 Monthly Lows Against Dollar Amid ECB Divergence and Rate Hike Uncertainty

On Wednesday, the EUR/USD dropped to monthly lows near 1.0800 but later recovered some losses during the American session. The Euro faced downward pressure due to divergence among European Central Bank (ECB) officials and uncertainty regarding future rate hikes. Eurozone bond yields rose, although US yields outpaced them. Risk sentiment improved, leading to a slight weakening of the US Dollar. The Federal Reserve showed some division on their next course of action, with a 28% chance of a rate hike at the June meeting according to the CME Fed Watch Tool. Mixed US housing data was released, and upcoming data includes Jobless Claims, the Philly Fed index, and Existing Home Sales. While the debt ceiling situation has become less dramatic, a resolution is still pending.

Chart EURUSD by TradingView

According to technical analysis, the EUR/USD pair is currently moving sideways after a downward movement on Wednesday. The price is currently trading between the lower and middle bands of the Bollinger Bands. It is expected that the EUR/USD will make a slight upward move towards the middle band before determining its next direction. The Relative Strength Index (RSI) is currently at 36, indicating an overall bearish trend in the EUR/USD market.

Resistance: 1.0885, 1.0930

Support: 1.0820, 1.0785

XAU/USD (4 Hours)

Gold (XAU/USD) Extends Decline as Dollar Strengthens Despite Positive Market Sentiment

Spot Gold (XAU/USD) experienced a decline, reaching its lowest level for May at $1,974.99 per troy ounce. The XAU/USD pair rebounded slightly after the opening of Wall Street and traded around $1,980. The fall in gold prices was driven by renewed demand for the US Dollar, despite an improved market mood. President Joe Biden and congressional leaders met to discuss extending the debt ceiling, and positive statements from Republican Kevin McCarthy raised hopes of reaching a deal by the end of the week. Asian and European stock markets closed with mixed results, while American markets showed substantial gains, which had a dampening effect on the US Dollar.

Federal Reserve officials attempted to downplay the likelihood of a rate cut later in the year, emphasizing that more work needs to be done. Cleveland Fed President Loretta Mester stated that she believes the central bank has not yet reached a point where interest rates can be held steady, as inflation remains persistent. While financial markets have priced in a pause in rate hikes for June and July, Fed members are still discussing whether or not to proceed with the pause.

Chart XAUUSD by TradingView

According to technical analysis, XAU/USD continued to fall on Wednesday, leading to further downward pressure on the lower band of the Bollinger Bands. There is a possibility that XAU/USD may experience an upward movement towards the middle band of the Bollinger Bands. Currently, the Relative Strength Index (RSI) stands at 34, indicating that XAU/USD is in a bearish trend.

Resistance: $1,991, $2,002

Support: $1,974, $1,966

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