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Daily Technical Insights 8th August 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 Rises Amid Weaker Dollar and Market Focus on US Inflation Data

The EUR/USD pair rebounded to 1.1000 during the American session, propelled by a weakened US dollar and improved risk appetite. While Monday brought relative calm to financial markets, attention remains fixed on the upcoming US inflation figures later in the week. Germany’s Industrial Production data for June displayed a larger-than-expected contraction of 1.5%, diverging from the projected -0.4% decline. Meanwhile, Eurozone Sentix Investor Confidence showed recovery, reaching -18.9 from -22.5. In the coming days, the spotlight shifts to Germany’s final Consumer Price Index (CPI) report for July, anticipated to reflect an unchanged annual rate of 6.2%.

Market sentiment revolves around the possibility of an impending rate hike by the European Central Bank (ECB), though the September meeting might not be the venue for such action. While the likelihood of a rate hike remains below 50% for September, odds increase to 60% for October, as indicated by the interest rate market. The EUR/USD’s trajectory continues to hinge on the performance of the US Dollar, which posted mixed results on Monday following the Non-Farm Payrolls (NFP) report-induced decline on Friday. The upcoming US inflation data release on Thursday and Friday takes center stage, with the US Dollar Index exhibiting a bearish bias in the short term, tempered by the underlying strength of the US economy.

Chart EURUSD by TradingView

Based on technical analysis, the EUR/USD remained steady on Monday as the market awaited upcoming US inflation data for the week, specifically CPI and PPI, while also attempting to move toward the middle band of the Bollinger Bands. Right now, the price is slightly above the middle band, creating a small gap between the upper and lower bands of the Bollinger Bands. The Relative Strength Index (RSI) is currently at 50, showing that the EUR/USD is in a phase of consolidation.

Resistance: 1.1038, 1.1121

Support: 1.0915, 1.0839

XAU/USD (4 Hours)

XAU/USD Retreats as USD Gains Momentum Amid Fed Tightening Concerns

The XAU/USD pair experienced a reversal in its recent gains as the US Dollar gained strength, trading at around $1,933 per troy ounce after the close of London’s session. Concerns over the Federal Reserve’s ongoing tightening measures in the new week led to a risk-averse shift in financial markets. While the USD’s rally paused prior to Wall Street’s opening, comments from Fed’s New York President John C. Williams provided some reassurance, emphasizing data-dependency for any future rate adjustments. As Wall Street saw upward momentum, particularly reflected in the Dow Jones Industrial Average’s rise by approximately 350 points, the precious metal faced downward pressure. In the week ahead, market attention will be focused on the US Consumer Price Index (CPI) data for July, with potential implications for USD sentiment depending on the outcome relative to expectations.

Chart XAUUSD by TradingView

Based on technical analysis, the XAU/USD faced a small decrease on Monday, aiming to get closer to the lower band of the Bollinger Bands. Right now, the price is a bit above the lower band in the Bollinger Bands setup. The Relative Strength Index (RSI) is at 40, indicating that the XAU/USD pair has a somewhat negative outlook.

Resistance: $1,945, $1,963

Support: $1,930, $1,912

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