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Spreads
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EUR/USD (4 Hours)
US Dollar Strengthens as EUR/USD Faces Bearish Pressure
The EUR/USD faced downward pressure as it dropped below key moving averages, testing levels below 1.0900. While a recovery from the lows could alleviate some bearish sentiment, the overall trend remains downward, contributing to the US Dollar’s resilience across the market.
The US Dollar Index closed above 103.00, achieving its highest daily close in over a month on Tuesday, driven by rising US Treasury yields. Despite expectations of an unchanged interest rate policy by the Federal Reserve (Fed), the Greenback remains robust. US yields continue their upward trajectory, with the 10-year approaching 4.20% and the 2-year nearing 5%. Retail Sales data from the US is scheduled for release. Meanwhile, the Euro faced losses against the Swiss Franc and the Pound on Monday, partly due to Germany’s Wholesale Price Index dropping 0.2% in July, although the annual rate performed slightly below expectations. The upcoming ZEW Survey release will provide further insights into the Euro’s performance.
Based on technical analysis, the EUR/USD exhibited a downward movement on Monday and initiated a push towards the lower boundary of the Bollinger Bands. Nevertheless, it subsequently experienced a minor upward shift, with the potential to rise further towards the central line of the Bollinger Bands. The Relative Strength Index (RSI) presently stands at 38, signifying that the EUR/USD is currently in a consolidation phase with a slight bearish undertone.
Resistance: 1.0935, 1.1038
Support: 1.0874, 1.0789
XAU/USD (4 Hours)
XAU/USD Gold Prices Plunge Amidst Rising US Dollar Demand
Gold prices experienced a sharp decline on Monday due to increased demand for the US Dollar in a risk-averse climate. The week began with investors closely monitoring China, where real estate giant Country Garden Holdings’ warning of a $7.6 billion first-half loss triggered concerns of contagion. This led to a surge in speculative interest towards the safe-haven US Dollar.
Although worries eased briefly during European trading hours, they resurfaced before Wall Street’s opening. XAU/USD dropped to $1,902.68 per troy ounce, almost matching July’s low. However, the positive sentiment on Wall Street interrupted the US Dollar’s rally, allowing XAU/USD to recover slightly from its low. While equities posted modest gains, they curtailed the downside for the American currency.
Amidst a sparse macroeconomic calendar, the focus remains on the upcoming releases from the United States and the United Kingdom. The US is set to reveal Retail Sales data on Tuesday, while the UK will provide updates on employment and inflation in the coming days.
Based on technical analysis, the XAU/USD witnessed a slight decrease on Monday, the price managed to reach the lower band of the Bollinger Bands during this movement. At present, the price is retracing higher. The Relative Strength Index (RSI) is currently at 37, indicating that the XAU/USD pair is exhibiting a somewhat bearish sentiment.
Resistance: $1,912, $1,923
Support: $1,902, $1,892
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