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Daily Technical Insights 6th 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 Slides to June Lows Amidst Stronger US Dollar and Eurozone Concerns

The EUR/USD pair recently experienced a significant drop, breaking decisively below the 1.0760 level and reaching a low of 1.0706, its lowest point since June. This decline is primarily attributed to the strength of the US Dollar, driven by caution in the markets and higher US yields. The US Dollar Index reached a nine-month high near 105.00. Conversely, the Euro faced downward pressure due to concerns over the Eurozone’s economic outlook, with September PMIs reflecting this sentiment, particularly the Eurozone’s Service PMI falling to 47.9, below the preliminary reading of 48.3. Looking ahead, economic data releases will continue to play a pivotal role in shaping the market’s expectations. Germany will unveil Factory Orders data, and the Eurozone will present Retail Sales figures. In the US, the ISM Services PMI is scheduled. Federal Reserve officials remain open to the possibility of further rate hikes, despite market perceptions of a rate hike pause. This divergence in economic outlook between the US and Eurozone is likely to maintain pressure on the EUR/USD pair.

Chart EURUSD by TradingView

According to technical analysis, the EUR/USD moves lower on Tuesday and is currently trading just above the lower bands of the Bollinger Bands. This movement suggests the possibility of another downward move to create a lower push to the lower band. The Relative Strength Index (RSI) is currently at 26, 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 Dips as Risk Aversion Grows Amid Economic Concerns

Risk aversion dominated the financial markets on Tuesday, driven by concerns of a global economic setback triggered by disappointing S&P Global Producer Manager Indexes (PMIs). This surge in risk aversion prompted speculative interest to flock to the US Dollar, resulting in XAU/USD, the Gold to US Dollar exchange rate, declining to $1,925.35 per troy ounce. The S&P Global reports revealed a significant economic slowdown in August, with China’s services output dropping to 51.8, down from the previous 54.1, marking the slowest growth rate this year. Similarly, the Euro Zone reported downward revisions, with the EU Composite PMI hitting a nearly three-year low at 46.7. While US figures were set to be released on Wednesday due to a holiday delay, the US Dollar benefited from the risk-averse sentiment, supported by the country’s economic resilience. Wall Street returned cautiously after a long weekend, with slight losses observed among the major indexes, pending macroeconomic indicators later in the week.

Chart XAUUSD by TradingView

According to technical analysis, XAU/USD traded flat on Tuesday and created a push to the lower band of the Bollinger Bands. Currently, the price is moving above the lower band, indicating a possibility of a slight increase in Gold’s value, but it’s still in a bearish mode. The Relative Strength Index (RSI) currently stands at 36, suggesting that the XAU/USD pair is now starting to enter a bearish mode.

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.