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Daily Technical Insights 14th 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 Reacts to Inflation Data and Central Bank Meetings Amidst Volatility and Risk Appetite

The EUR/USD pair initially rose above 1.0820 on Tuesday following US inflation data but later retreated to around 1.0780 due to high government bond yields and risk appetite. Despite finishing positively, the pair remained far from its peak. The overall sentiment is bullish, but volatility is anticipated as the market awaits the FOMC meeting and the European Central Bank (ECB) decision.

German inflation data indicated a 6.1% annual increase in May, while the German ZEW survey improved unexpectedly in June. The US Consumer Price Index (CPI) for May showed a 0.1% rise, lower than expected, with an annual rate of 4%, suggesting a slowdown in inflation. This data could lead the Federal Reserve to pause its tightening cycle. The US Dollar initially fell but later recovered amid risk appetite and rising government bond yields. The future direction of the EUR/USD pair is expected to be influenced by the US Dollar’s performance ahead of the FOMC statement, with attention on economic projections and guidance from Federal Reserve Chair Jerome Powell.

Chart EURUSD by TradingView

According to technical analysis, the EUR/USD pair experienced an upward movement on Tuesday and was able to reach the upper band of the Bollinger Bands. It then slowly moved lower, targeting the middle band of the Bollinger Bands. The Relative Strength Index (RSI) is currently at 58, lower than the previous higher movement, indicating that the EUR/USD might be returning to a neutral stance.

Resistance: 1.0808, 1.0847

Support: 1.0757, 1.0721

XAU/USD (4 Hours)

Optimism Reigns as Soft US Inflation Data Fuels Dovish Expectations; Gold (XAU/USD) Trades Near Daily Lows

In response to softer-than-anticipated US inflation figures, Spot Gold (XAU/USD) traded near a daily low of $1,942 as optimism prevailed. The US Dollar experienced a decline throughout the day, further accelerating as the Consumer Price Index (CPI) fell below market expectations. The Bureau of Labor Statistics reported a 0.1% month-on-month rise in May’s CPI, accompanied by a 4% year-on-year increase, with the core annual CPI easing from 5.5% to 5.3%. These figures bolstered expectations of a dovish Federal Reserve (Fed), which is set to announce an update on monetary policy. Meanwhile, global stock markets embraced the positive news, while XAU/USD, after reaching a peak of $1,970.96 following the CPI release, felt the weight of optimism.

Chart XAUUSD by TradingView

According to technical analysis, the XAU/USD pair is moving lower due to a shift in market sentiment towards risk-on conditions following lower-than-expected US inflation data. The XAU/USD has reached the lower band of the Bollinger Bands. Currently, the Relative Strength Index (RSI) is at 40, indicating that the XAU/USD is still in a bearish condition but has the potential to move slightly higher towards the middle band of the Bollinger Bands.

Resistance: $1,955, $1,972

Support: $1,939, $1,932

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