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Daily Technical Insights 8th 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 Hits Three-Month Low Amid Gloomy Eurozone Data and Strong US Dollar

The EUR/USD pair continued its decline, marking its lowest daily close in three months, hovering near the 1.0700 level. The prevailing bias remains bearish as the Euro remains vulnerable in the face of a resilient US Dollar. Strong economic data from the United States provided support to the Greenback, which was further buoyed by cautious market sentiment.

In contrast to the US, economic indicators from the Eurozone painted a less optimistic picture. The second-quarter employment change in the Eurozone remained unchanged at 0.2%, while GDP growth was revised down from 0.3% to 0.1%. Germany’s Industrial Production data for July showed a larger-than-expected decline of 0.8%. These economic disparities between the Eurozone and the US have heightened concerns about the EUR/USD pair, with worries about economic stagnation in the Eurozone contrasting with the relatively stronger US economy. Notably, US Initial Jobless Claims dropped to 216K, below market expectations of 234K for the week ending September 1, and Unit Labor Costs for the second quarter were revised higher from 1.6% to 2.2%. This data initially boosted US Treasury yields, supporting the US Dollar, although later in the session, the dollar’s gains were limited as Treasury yields reversed sharply.

Chart EURUSD by TradingView

According to technical analysis, the EUR/USD moved slightly lower on Thursday and is currently trading just below the middle band of the Bollinger Bands. This movement suggests the possibility of a slight upward movement to reach the middle band. The Relative Strength Index (RSI) is currently at 38, indicating that the EUR/USD is trending lower and attempting to maintain a bearish trend.

Resistance: 1.0759, 1.0803

Support: 1.0702, 1.0653

XAU/USD (4 Hours)

XAU/USD Consolidates as Strong US Dollar Gains Momentum Amid Upbeat Economic Data

XAU/USD is in consolidation mode after experiencing weekly losses and is currently trading around the $1,920 mark during the American trading session. The US Dollar continues to assert its dominance against most major currencies, driven by positive United States (US) economic data and the possibility of another Federal Reserve (Fed) interest rate hike.

Gold prices initially rebounded from an early low near $1,916 as US Treasury yields retreated from their earlier highs. However, the Greenback’s decline was limited due to robust US employment-related data. Meanwhile, global stock markets have been reflecting a cautious sentiment, with many major indexes trading in negative territory.

In the latest economic releases, the US reported Initial Jobless Claims for the week ending September 1, which came in at 216K, significantly better than the expected 234K. Additionally, the country published Q2 Nonfarm Productivity, showing a growth of 3.5%, slightly below the anticipated 3.8%, and Unit Labor Costs for the same period, which increased by 2.2%, surpassing expectations. These data points indicate stronger-than-expected economic growth in the US, setting it apart from the economic challenges faced by other major economies. Consequently, the US Dollar is strengthening further in a risk-averse market environment.

Chart XAUUSD by TradingView

According to technical analysis, XAU/USD remained flat on Thursday, oscillating between the lower and middle bands of the Bollinger Bands. At present, the price is showing a slight upward movement and is approaching the middle band, suggesting the potential for a modest increase in Gold’s value. However, it is important to note that the market still maintains a bearish bias. The Relative Strength Index (RSI) is currently at 45, indicating that the XAU/USD pair is still in a bearish mode but making an effort to shift back into a neutral zone.

Resistance: $1,925, $1,935

Support: $1,912, $1,903

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