Daily Technical Insights 9th January 2024

　　

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

Picks of the Day Analysis

EUR/USD (4 Hours)

EUR/USD Gains Ground Amidst USD Index Decline and Fed Rate Cut Speculation

EUR/USD saw a promising rise early in the week, reaching around 1.0975/80 against a weakening USD Index (DXY), sparked by uncertainties despite strong December Payrolls. Investor demand for bonds drove yields down on both sides of the Atlantic, slightly dimming the optimistic start to the trading year. The market’s focus remains on the Federal Reserve’s potential rate cuts versus the more restrained stance of the ECB, with consensus leaning towards a later rate cut by the ECB. Factors contributing to the euro’s strength included an uptick in Investor Confidence and stable Consumer Confidence, while Retail Sales in the bloc showed a slight contraction.

Chart EUR/USD by TradingView

On Monday, the EUR/USD moved slightly higher and reached the upper band of the Bollinger Bands. Currently, the price moving just below the upper band, suggesting a potential downward movement. Notably, the Relative Strength Index (RSI) maintains its position at 51, signaling a neutral outlook for this currency pair.

Resistance: 1.0980, 1.1068

Support: 1.0892, 1.0814

XAU/USD (4 Hours)

XAU/USD Finds Support Amid Dollar Weakness and Fed Speculation

During American trading, XAU/USD managed to recover from early losses, hovering around $2,030 per ounce after hitting a mid-December low of $2,016.61. The weakening US Dollar spurred this turnaround, fueled by market optimism driven by expectations of a potential Federal Reserve rate cut in March. Additionally, Bank of America analysts’ predictions of a tapering in Treasury holdings by the Fed further influenced the market sentiment. As government bond yields dipped and stock indexes fluctuated, attention turned to the upcoming US inflation update, with the December Consumer Price Index anticipated to show a 3.2% YoY increase, potentially impacting the future trajectory of gold prices.

Chart XAU/USD by TradingView

On Monday, XAU/USD moved lower and reached the lower band of the Bollinger Bands. Currently, the price moving higher and trying to reach the middle band. The Relative Strength Index (RSI) stands at 42, signaling a neutral but bearish outlook for this pair.

Resistance: $2,050, $2,070

Support: $2,030, $2,009

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