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EUR/USD Slips as Dollar Strengthens and Economic Concerns Weigh
The EUR/USD pair experienced a second consecutive day of losses, dropping below the 20-day simple moving average. Factors contributing to the decline included a cautious sentiment in equity markets, higher US yields, and a stronger US dollar following the release of the FOMC minutes. In Eurozone data, while inflation expectations remained steady, the Producer Price Index showed a negative annual rate, and the final June Services and Composite PMI figures were revised lower, sparking recession fears. The US dollar strengthened across the board, supported by the FOMC minutes and rising US yields. Attention now shifts to US labor market data, including the ADP private employment report, Jobless Claims, and JOLTS, followed by Nonfarm Payrolls later in the week.
According to technical analysis, the EUR/USD pair moved lower on Wednesday and has reached the lower band of the Bollinger Bands. Currently, the price is still hovering around the lower band, indicating a potential for further downward movement. The Relative Strength Index (RSI) is currently at 37, suggesting a bearish sentiment for the EUR/USD.
Resistance: 1.0926, 1.0965
Support: 1.0842, 1.0790
Spot Gold (XAU/USD) Prices Decline as Market Sentiment Deteriorates Ahead of FOMC Meeting Minutes
Gold prices faced downward pressure as market sentiment worsened, causing XAU/USD to trade at around $1,924 after reaching a weekly high of $1,934.99. The demand for the US Dollar increased due to a deteriorated market sentiment ahead of the release of the Federal Open Market Committee (FOMC) Meeting Minutes. Additionally, concerns arose over China’s export restrictions on metals essential for the chip industry and softer-than-expected growth in the services sector. The FOMC’s decision to maintain the Fund Rate at 5.00/25% and the possibility of multiple rate hikes by year-end further influenced market expectations and the potential for US Dollar gains.
According to technical analysis, the XAU/USD pair is experiencing a downward movement on Wednesday, with the potential to reach the lower band of the Bollinger Bands. Currently, the price is slightly below the middle band and may move further downward towards the lower band of the Bollinger Bands. The Relative Strength Index (RSI) currently stands at 48, having fallen from a higher level, indicating a neutral stance for XAU/USD with a slight bearish bias.
Resistance: $1,932, $1,939
Support: $1,911, $1,903