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Daily Technical Insights 12th 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 Rebounds as ECB Meeting Looms Amidst Dollar Weakness

The EUR/USD pair staged a recovery, bouncing back from three-month lows to reach the 1.0760 level, marking its highest point in six days. This upward movement was primarily driven by a broad weakening of the US Dollar, attributed to improved risk sentiment. The US Dollar Index registered its first decline in nearly two weeks. The upcoming European Central Bank (ECB) monetary policy meeting on Thursday holds the possibility of a modest interest rate hike, although the market wouldn’t be shocked by a pause. Last week, uncertainty surrounding the ECB’s future actions had put pressure on the Euro. Additionally, the German ZEW Survey is scheduled for release on Tuesday.

However, it’s important to note that the European Commission’s reduction of its 2023 growth forecast, particularly for Germany, which is expected to contract by 0.4%, has had an impact. The US economy’s relative strength continues to bolster the Greenback. Looking ahead, the key report in the US is the Consumer Price Index (CPI) on Wednesday, ahead of the next week’s Federal Open Market Committee (FOMC) meeting, where no rate hike is anticipated.

Chart EURUSD by TradingView

According to technical analysis, the EUR/USD moved slightly higher on Monday and is currently trading just below the upper band of the Bollinger Bands. This movement suggests the possibility of a slight downward movement reaching the middle band. The Relative Strength Index (RSI) is currently at 53, indicating that the EUR/USD is in neutral stance.

Resistance: 1.0759, 1.0803

Support: 1.0702, 1.0653

XAU/USD (4 Hours)

XAU/USD Rise as Dollar Weakens in Risk-On Environment Amid Asia’s Economic Rebound

Gold prices saw an uptick on Monday, as the demand for the US Dollar waned in a risk-on environment. XAU/USD reached as high as $1,930.70 per troy ounce before settling at $1,924 as the initial optimism gradually subsided throughout the day.

This shift in gold prices was influenced by stock market rebounds, driven by news of improving economic conditions in Asia. China reported an increase in the August Consumer Price Index (CPI), reversing earlier negative trends, and the Bank of Japan (BoJ) Governor Kazuo Ueda’s comments about a potential exit from negative rates contributed to a decline in the safe-haven US Dollar across the foreign exchange market.

While the positive sentiment extended to Wall Street with major indexes trading in the green, caution prevailed ahead of significant upcoming events. Speculators are keenly awaiting the US August Consumer Price Index (CPI), with an annual inflation rate expected to be slightly higher at 3.6%. Additionally, the European Central Bank (ECB) will announce its monetary policy decision later in the week, with expectations leaning toward the ECB maintaining its current stance, although the possibility of a surprise 25 basis point rate hike lingers due to persistent price pressures. US indexes held onto modest gains, with the Nasdaq Composite leading the way, while firmer US Treasury yields contributed to the Dollar’s recovery, with the 10-year note offering 4.29%.

Chart XAUUSD by TradingView

According to technical analysis, XAU/USD remained flat on Monday, oscillating around the middle band of the Bollinger Bands. Currently, the price is showing a consolidating movement around the middle band. 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.