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Spreads
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Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.
EUR/USD Rebounds as ECB Reaffirms Rate Hike Expectations, US Dollar Supported by Fed’s Hawkish Stance
The EUR/USD pair experienced a drop below 1.0900 but rebounded during the American session, aided by the European Central Bank’s (ECB) confirmation of upcoming rate hikes. The Euro received support from ECB President Lagarde’s comments, while the US Dollar benefited from rising expectations of a rate hike by the Federal Reserve (Fed) in July.
Inflation data from the Eurozone started to emerge, with Italy’s Harmonised Consumer Price Index slowing to 6.7% in June. Despite declining headline inflation, ECB members remain focused on persistent inflation concerns. Better-than-expected US economic data further strengthened expectations of a Fed rate hike, boosting the US Dollar.
More economic data is expected, including jobless claims, GDP estimates, and the Core Personal Consumption Expenditure report. While the US Dollar gains momentum against certain currencies, the Euro continues to hold its strength in the market.
According to technical analysis, the EUR/USD pair moved lower on Wednesday and reached below the middle band of the Bollinger Bands.
Currently, the price is moving just below the middle band of the Bollinger Bands which shows that there’s a possibility that the price will continue to move lower. The Relative Strength Index (RSI) is currently at 44, suggesting that the EUR/USD is still in a neutral position but slightly bearish.
Resistance: 1.0922, 1.0965
Support: 1.0890, 1.0842
XAU/USD Under Selling Pressure as US Data and Central Bankers’ Comments Drive Risk-Off Sentiment
XAU/USD faced selling pressure for the third consecutive day, reaching a low of $1,902.80 during the American session. The US Dollar gained strength due to disappointing US data and cautious remarks from central bankers, leading to a risk-off sentiment in financial markets.
The release of the preliminary estimate of the May Goods Trade Balance, showing a deficit of $91.1 billion, and lower-than-expected Wholesale Inventories in May contributed to the shift in sentiment. During the ECB Forum on Central Banking, Federal Reserve Chairman Jerome Powell stated that inflation needs more time to align with the Fed’s target, leaving room for further monetary tightening.
Bank of England’s Andrew Bailey mentioned the UK economy’s resilience despite persistent inflation, while ECB President Christine Lagarde hinted at a potential rate hike in July. These developments triggered selling pressure on Wall Street and initially boosted the US Dollar, although it later retraced some of its gains.
According to technical analysis, the XAU/USD pair is moving lower to reach below the previous low on June 23rd, 2023, and able to reach the lower band of the Bollinger Bands.
Currently, the price is slightly higher than the lower band, suggesting a potential upward movement towards the middle band of the Bollinger Bands. The Relative Strength Index (RSI) is currently at 40, indicating that the XAU/USD is in a neutral but slightly bearish condition.
Resistance: $1,921, $1,932
Support: $1,903, $1,890
Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.
