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Daily Technical Insights 13th 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 Pullback Ahead of Key Economic Data and ECB Meeting

The EUR/USD pair experienced a moderate pullback on Tuesday, initially spiking to 1.0769 during the Asian session, its highest level in a week, before retracing while still holding above the 1.0700 mark. Investors are eagerly awaiting the release of US consumer inflation data and the European Central Bank (ECB) meeting.

The market received mixed signals from Germany, with the current condition index dropping to -79.4, its lowest point since August 2020, and the expected index coming in at -11.4, surpassing the forecast of -15.0. These indicators contribute to concerns about a potential recession in Germany and the Eurozone, impacting expectations regarding an ECB rate hike. Market pricing suggests a nearly 50% probability of a rate hike on Thursday, but most analysts anticipate at least one 25 basis points rate hike by year-end. The economic outlook of the Eurozone, in contrast to the more resilient US economy, remains a critical factor influencing the direction of the EUR/USD pair, with the US Consumer Price Index (CPI) report on Wednesday poised to play a pivotal role in shaping market sentiment.

Chart EURUSD by TradingView

According to technical analysis, EUR/USD moved higher on Tuesday and is currently trading just below the upper band of the Bollinger Bands. This movement suggests the possibility of further continuation to the upside, potentially pushing towards the upper band. The Relative Strength Index (RSI) is currently at 57, indicating that EUR/USD is in a neutral stance with a slight bullish bias.

Resistance: 1.0759, 1.0803

Support: 1.0702, 1.0653

XAU/USD (4 Hours)

XAU/USD Dips Amid Dollar Demand but Recovers Slightly as Markets Await US CPI Data

Gold prices saw a decline on Tuesday, influenced by renewed demand for the US Dollar, as XAU/USD dropped to $1,907.53 per troy ounce. The decline in the precious metal was most pronounced during European trading hours, as weak local data raised concerns about economic setbacks in the United Kingdom and the Euro Zone.

However, the mood improved as Wall Street opened, with local indexes outperforming their international counterparts. The Dow Jones Industrial Average was in positive territory, while the S&P500 and the Nasdaq Composite posted minor losses. XAU/USD managed to recover some of its earlier losses, trading at approximately $1,912 per troy ounce.

Speculative traders are exercising caution in anticipation of significant events scheduled for the latter part of the week, refraining from making strong commitments. Nevertheless, Gold has been among the weakest performers against the US Dollar this week. Attention now turns to the United States (US) Consumer Price Index (CPI), which is expected to rise by 0.6% MoM and 3.6% YoY, surpassing July’s figures. Higher-than-expected CPI numbers could fuel speculation about an impending Federal Reserve (Fed) rate hike, benefiting the USD in a risk-averse environment. Conversely, if CPI figures fall short of market expectations, markets may turn notably optimistic.

Chart XAUUSD by TradingView

According to technical analysis, XAU/USD moved lower on Tuesday and reached the lower band of the Bollinger Bands. Currently, the price is trading slightly above the lower band with the potential for further downward movement. The Relative Strength Index (RSI) is currently at 35, indicating that the XAU/USD pair is still biased towards the bearish side.

Resistance: $1,919, $1,925

Support: $1,910, $1,903

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