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Daily Technical Insights 24 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 Slides as Dollar Strengthens Amid Weak Eurozone Data: Market Focus on Upcoming Releases and US Debt Ceiling Negotiation

The EUR/USD continued to fall after a brief recovery, reaching last week’s lows around 1.0760. The euro remains weak compared to the US dollar due to a stronger dollar and disappointing data from the Eurozone. The European Central Bank’s hawkish statements did not provide much support as economic indicators, such as the Manufacturing index, came below expectations. In contrast, the US dollar remained strong, supported by risk aversion, and mixed economic data. Market participants are eagerly awaiting upcoming economic releases from the Eurozone, as well as the FOMC minutes and ongoing debt-ceiling negotiations in the US.

Chart EURUSD by TradingView

According to technical analysis, the EUR/USD pair is currently undergoing a minor consolidation near its lowest price and close to the lower band of the Bollinger Bands. It is expected that the EUR/USD will remain in a consolidation phase throughout the day. The Relative Strength Index (RSI) is currently at 36, indicating bearish sentiment for the EUR/USD.

Resistance: 1.0815, 1.0848

Support: 1.0750, 1.0715

XAU/USD (4 Hours)

Gold (XAU/USD) Prices Recover Slightly as Market Concerns and Fed’s Mixed Messages Weigh on Investor Sentiment

Gold prices (XAU/USD) initially dropped to $1,954.22 during European trading due to concerns in the market favoring the US Dollar. However, gold managed to recover slightly and is currently trading at around $1,972, showing minimal change for the second consecutive day. The financial markets are exhibiting risk aversion due to lackluster macroeconomic data and uncertainty surrounding the Federal Reserve’s future actions. While the Fed had taken a cautious approach in raising rates earlier in May, recent statements from various Fed members have surprised investors with a more hawkish stance, suggesting the possibility of one or even two more rate hikes. The release of the FOMC meeting minutes on Wednesday is anticipated to provide further insight into monetary policy plans. Additionally, S&P Global’s preliminary estimates indicate that the US services sector experienced faster growth than expected, while manufacturing output contracted to a three-month low. Europe demonstrated a similar pattern, with accelerating services output but contracting industrial activity.

Chart XAUUSD by TradingView

According to technical analysis, XAU/USD experienced a small upward movement on Tuesday and successfully reached our resistance level. It settled around the middle band of the Bollinger Bands. There is a possibility that XAU/USD could continue moving higher and attempt to reach the upper band of the Bollinger Bands. Currently, the Relative Strength Index (RSI) is at 48, indicating that XAU/USD has returned to a neutral position.

Resistance: $1,991, $2,013

Support: $1,950, $1,934

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