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Daily Technical Insights 5th September 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 Sees Modest Uptick Amid ECB’s Inaction, Eyes on Eurozone Data and US Factory Orders

The EUR/USD currency pair saw a slight increase in value on Monday, rebounding from a recent two-month low. Although it remained above 1.0770, it struggled to establish firm support above 1.0800. European Central Bank (ECB) President Christine Lagarde’s comments on central banks’ role in managing inflation expectations had little impact on the market. Upcoming events include the final Eurozone Services PMI reading and Eurostat’s Producer Price Index release, while the US Dollar experienced a minor decline ahead of the release of Factory Orders data.

Chart EURUSD by TradingView

According to technical analysis, the EUR/USD dropped a bit on Monday and is currently trading sideways between the lower and middle bands of the Bollinger Bands. This movement suggests the possibility of another downward move to reach the lower band. The Relative Strength Index (RSI) is currently at 39, indicating that the EUR/USD is trending lower and attempting to stay in a bearish trend.

Resistance: 1.0832, 1.0880

Support: 1.0780, 1.0734

XAU/USD (4 Hours)

XAU/USD Surges to Four-Week High as USD Weakens Amid Fed Uncertainty

The US Dollar continued its decline in the forex market, driving XAU/USD to a four-week high at $1,949.02 per troy ounce. This decline was triggered by disappointing US macroeconomic data, which raised doubts about the Federal Reserve’s tightening policies. The August ADP Survey revealed a slowdown in private job creation, and Q2 GDP figures were downwardly revised. Despite this, July Pending Home Sales exceeded expectations. Stock markets saw modest gains, and government bond yields retreated as the probability of the Fed keeping rates on hold next September increased to 88.5%, according to the CME FedWatch Tool. However, concerns arose about the Fed pressuring regional lenders to bolster their liquidity strategy, causing Wall Street to retract from recent highs. The upcoming focus is on US inflation data, specifically the July Core PCE Price Index, which is expected to show a slight easing in August. Lower inflationary pressures may reinforce the case for no further rate hikes and boost investor sentiment.

Chart XAUUSD by TradingView

According to technical analysis, XAU/USD traded flat on Monday and formed narrow Bollinger Bands. At present, the price is close to the lower band, indicating a possibility of a slight increase in Gold’s value, but it’s still in a consolidation phase. The Relative Strength Index (RSI) currently stands at 50, suggesting that the XAU/USD pair is now in a neutral position.

Resistance: $1,954, $1,965

Support: $1,936, $1,926

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