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Technical Outlook

  

-EURUSD price breaks the bullish channel and is in consolidation state.

-Strong bearish RSI divergence formation in XAUUSD, signaling the market may turn bearish.

EUROZONE Consumer Price Index (CPI) YoY

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation. US CPI rose to 6.5% year on year, a decline from the previous months.

Europe’s CPI declined last month to 8.5%, missing the forecast of 9.0%. However, the previous month was 9.2%. Higher interest rates has cooled down inflation a bit over the last few months.

Supply constraints in the energy sector are declining, food and energy prices are starting to normalise. ECB board member Fabio Panetta, in his speech during an event organised by the Centre of European Reform said that interest rates hikes should be lowered to avoid risks to the growth of the economy. 

Report is due Thursday, 23 February at 10:00 GMT.

EUR/USD Technical Analysis:

Analysis using price action:

EURUSD is in the uptrend. The bottom was formed at $0.95383 on 28th Sept 2023. Currently, the market has risen by 12.06% from the bottom, accumulating 1150 pips.

As seen in the chart above, the market has gathered buyers, and fewer sellers mean the buying sentiment is higher. The price has been trading inside the bullish channel, not breaking any significant levels.

The MA formed a golden cross after the 50MA crossed above the 200MA on 30th Dec 2023, signaling the prices may go up higher. From the cross-formation, the market went up by 4.07%.

The current high formed is at $1.10330 on 2nd Feb. The market broke the bullish channel and halted around the 1.06613 zone, which is now forming a range. Currently, the price is trading between the resistance high at $1.10094 and the previous swing low at $1.04999.

The RSI line is at 44.38, showing neutral overbought and oversold condition. Traders must wait for the price to either break above the resistance or below the support for a clear indication of where the price may be.

Pivot Points: EURUSD

  Support  Resistance
S11.0641R11.0710
S21.0613R21.0751
S31.0572R31.0779

US GDP (QOQ)

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.

US fourth quarter GDP increased 2.9%, amidst recession fears. Exceeding expectations of 2.6%. The growth rate was lower than the third quarter which came to 3.2%. Although it was a decline from the previous quarter, consumer spending numbers were still positive and this makes up 68% of the GDP.

Report is due Thursday, 23 February at 13:30 GMT.

XAUUSD Technial Analysis:

Analysis using price action:

XAUUSD is was in uptrend. From the most recent bottom formed at $1616.71 on 3rd Nov 2022, the market is now up by 13.88%. The support zone at the bottom had three touches before breaking the downtrend and moving up. The price was trading inside a bullish channel with higher highs and lows formation.

On 12th Jan 2023, the MA formed a golden cross with 50MA crossing above the 200MA, signaling bullish sentiment in the market. After the golden cross market moved up again by 4.72% and formed a high at $1959.75, at this point, a strong bearish RSI Divergence was signaling the bearish move was due.

The price has most recently touched support and is trading below 50MA. The RSI line is at 39.95, showing a bit of oversold condition. If the price breaks the most recent support at $1818.96, it may trade down; while it breaks the resistance zone at $1890.55, it may trade further up. Traders must keep in mind to look for extra confluence before trading any decision.

Pivot Points: XAUUSD

Support Resistance
S11831.56R11848.06
S21821.13R21854.13
S31815.06R31864.56

Vantage does not represent or warrant that the material provided here is accurate, current, or complete, and therefore should not be relied upon as such. The information provided here, whether from a third party or not, is not to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any financial instruments; or to participate in any specific trading strategy. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. We advise any readers of this content to seek their own advice. Without the approval of Vantage, reproduction or redistribution of this information is not permitted.

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