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Daily Technical Insights 1st June 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 Plunges Amid Souring Sentiment and US Debt-Limit Concerns

The EUR/USD experienced a sharp decline on Wednesday as risk aversion prompted an increased demand for the U.S. dollar against higher-yielding currencies. The pair reached a low of 1.0658 during the European session but managed a slight recovery to trade at 1.0685. Investor concerns revolved around the U.S. debt-limit bill, which President Joe Biden and House Speaker Kevin McCarthy reached a deal on Sunday. The bill faced doubts from representatives of both ruling parties, needing to make progress within the next 24 hours. Additionally, Chinese economic data, including a contraction in the NBS Manufacturing PMI, added to the negative sentiment. The European session revealed a decrease in German inflation, further highlighting easing price pressures in the Eurozone. Market participants will await the release of the U.S. Chicago Purchasing Managers’ Index and JOLTS Job Openings later in the day, along with insights from Federal Reserve officials, as they anticipate the central bank’s upcoming monetary policy meeting.

Chart EURUSD by TradingView

According to technical analysis, the EUR/USD pair is moving lower on Wednesday, creating a push for the lower band of the Bollinger Bands. Currently, EUR/USD moving back higher and trying to reach the middle band of the Bollinger bands. We are expecting that the EUR/USD will continue its upward movement today and try to reach the upper band of the Bollinger Bands. The Relative Strength Index (RSI) is currently at 43, indicating that the EUR/USD has returned to a neutral position.

Resistance: 1.0711, 1.0761

Support: 1.0655, 1.0636

XAU/USD (4 Hours)

Gold (XAU/USD) Holds Gains as Risk Aversion Persists Amidst Concerns over US Debt Ceiling

Gold prices (XAU/USD) continued its weekly rally, reaching $1,974.76 per troy ounce, its highest level in a week. XAU/USD is trading around $1,965, retaining its gains amidst a general aversion to risk. The market sentiment turned negative on Tuesday and remained subdued on Wednesday due to lackluster Chinese data and uncertainty surrounding the US debt ceiling bill. In addition, the April JOLTS Job Openings report showed a robust job market, leading market participants to factor in a 71% probability of a 25 basis points rate hike at the upcoming June Fed monetary policy meeting. The strengthening US Dollar against major currencies, driven by a decline in stock markets, caused XAU/USD to retreat slightly from its peak. However, thanks to its safe-haven status, gold maintained a significant portion of its intraday gains. The US debt-ceiling bill has made progress, passing the House Rules Committee and moving into Congress, with Senate Majority Leader Chuck Schumer expressing the intention to expedite its floor vote in the Senate.

Chart XAUUSD by TradingView

According to technical analysis, the XAU/USD is moving higher on Wednesday, reaching the upper band of the Bollinger Bands and break our previous resistance level at $1,962. There is a possibility that the XAU/USD will make a slight downward movement and return to the middle of the Bollinger Bands for today. Currently, the Relative Strength Index (RSI) stands at 56, indicating that the XAU/USD is in a neutral position but slightly bullish.

Resistance: $1,972, $1,991

Support: $1,953, $1,934

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