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Daily Technical Insights 16th 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 Retreats from Peak as US Dollar Stays Resilient Amid Economic Reports

The EUR/USD currency pair experienced a brief peak at 1.0951 on Tuesday, only to retract to 1.0900, highlighting ongoing seller influence and erasing daily gains. The US Dollar retains its robustness following favorable economic data. Eurozone data presented a mixed picture, with the German ZEW Expectation Index surpassing predictions at -12.3, while the Current Situation Index fell to -71.3, worse than expected. Eurozone Q2 growth, employment data, and June’s industrial production are awaited. In the US, retail sales exceeded forecasts, rising 0.7% in July, despite a lower-than-expected NY Empire State Manufacturing Index for August. The Dollar initially rose post-data but later dipped before rebounding, driven by risk aversion and US yield recovery. Wednesday brings building permits, industrial production figures, and Federal Reserve meeting minutes.

Chart EURUSD by TradingView

Based on technical analysis, the EUR/USD moves flat on Tuesday, creating a flat move in the bands of the Bollinger Bands. Currently, the price is moving between the middle and the lower of the Bollinger Bands. The Relative Strength Index (RSI) presently stands at 40, 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 Hits 3-Month Low at $1,896.33 Amid Risk-Averse Markets and Mixed Data

On Tuesday, the XAU/USD pair fell to its lowest point since June at $1,896.33 per troy ounce, currently hovering around $1,906. While demand for the US Dollar has eased with Wall Street’s opening, overall market sentiment remains risk-averse, benefiting the Greenback. Weaker-than-expected Chinese data earlier in the day dampened investor confidence, raising concerns of a global growth slowdown driven by the Asian economic giant.

Positive data emerged from the United States, with July’s Retail Sales exceeding expectations at a 0.7% rise, surpassing the projected 0.4%. The Retail Sales Control Group saw an even more substantial increase of 1%, doubling the previous figure. Although this positive news halted the decline in stocks, Wall Street remained in negative territory, albeit improved from pre-opening levels.

Meanwhile, government bond yields retreated from recent multi-month highs, putting downward pressure on the US Dollar throughout the latter half of the day. The decline in yields was prompted by a warning from Fitch Ratings analysts, suggesting potential downgrades for certain American banks.

Chart XAUUSD by TradingView

Based on technical analysis, the XAU/USD witnessed a slight decrease on Tuesday, 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

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