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Daily Technical Insights 19 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 Continues Downward Trend as US Dollar Strengthens Amid Rate Hike Speculations

The EUR/USD continued its downward trend, dropping for the fifth time in six days. There are no signs of stabilization as the US dollar gains strength in the market. Comments from the Federal Reserve indicating the lack of support for skipping a rate hike at the next meeting boosted US yields, leading to increased expectations of a rate hike (although still below 50%).

Recent US economic data, such as declining Initial Jobless Claims and an improved Philly Fed index, contributed to the strengthening of the US dollar. On the other hand, the European Central Bank’s concerns about inflation in the service sector have reduced expectations of further rate hikes for the Euro. Germany’s upcoming release of wholesale inflation numbers is anticipated to show a decline in the Producer Price Index and a decrease in the annual rate.

Chart EURUSD by TradingView

According to technical analysis, the EUR/USD pair is moving lower and creating a push to the lower band 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 25, indicating an overall bearish trend in the EUR/USD market.

Resistance: 1.0815, 1.0848

Support: 1.0750, 1.0715

XAU/USD (4 Hours)

Gold (XAU/USD) Extends Bearish Route as US Dollar Gains Amid Debt Ceiling Optimism and Hawkish Fed Comments

Spot gold (XAU/USD)continued its downward trend, hitting its lowest level since April 3 at $1,951.92 per troy ounce. Despite optimism in the financial markets regarding the extension of the US debt ceiling, the US dollar remained strong and gained further ground during the American session. House Speaker Kevin McCarthy expressed confidence in reaching a debt limit deal, while Federal Reserve speakers surprised with a hawkish tone, suggesting the possibility of an interest rate hike in June.

Economic data showed better-than-expected initial jobless claims and an improvement in the May Philadelphia Fed Manufacturing Survey, but existing home sales declined in April. US stock indexes traded mixed, with the Nasdaq Composite performing the best, and US Treasury yields rebounded, supporting the strength of the US dollar.

Chart XAUUSD by TradingView

According to technical analysis, XAU/USD continued to fall on Thursday, 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 23, indicating that XAU/USD is in a bearish trend.

Resistance: $1,974, $1,991

Support: $1,950, $1,934

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