Gold, Silver, EUR/USD Technical Analysis Amid Global Uncertainty

Gold (XAU) continued higher on Tuesday, reaching new records above $2,740. On the other hand, silver (XAG) shows strength after the breakout from $32.50. The price rallies in both metals are due to increased safe-haven demand driven by heightened tensions in the Middle East. The upcoming US election is also adding to global uncertainty. The Middle East war escalates global uncertainty and tensions among different nations.

The European Central Bank and the Bank of England are pursuing more aggressive interest rate cuts due to economic downturns. This action weakens their currencies, making gold more attractive. Moreover, the US dollar remains strong due to safe-haven demand and uncertainty surrounding the US election. The US dollar index has broken the key level of 103.90 and continues to advance. This strength in the US dollar has put pressure on the EUR/USD, approaching the support level of $1.0790.

Existing home sales data on Wednesday will impact the EUR/USD, gold, and silver markets. Thursday’s manufacturing and services PMI data will also further influence these markets. The ongoing conflict in the Middle East creates global uncertainty, and gold, silver, and the US dollar may remain elevated in the short term.

Gold (XAU) Technical Analysis

Gold Daily Chart – Gold Surge During Global Uncertainty

Gold remains in surge mode after breaking above the descending broadening wedge pattern. The price remains strong at the resistance level of $2750, determined by the red dotted trend line on the daily chart. The price shows no signs of correction, indicating the continuation of an upside rally. The escalating crisis in the Middle East and global uncertainty may continue to fuel gold’s upward momentum.

Gold 4-Hour Chart – Price Hits Target of $2,750

The 4-hour chart for the gold market shows that the price is approaching the target zone of the ascending channel. The target zone is calculated by the upper trendline of the ascending channel, which now extends up to $2,760. If gold reaches this resistance midweek, it may create short-term correction. Additionally, the overbought conditions by RSI suggest consolidation before the next upside move. However, the escalating prices may ignore short-term pullbacks.

Silver Technical Analysis

Silver Daily Chart – Breaks $32.50

Silver broke the inverted head-and-shoulders pattern at $32.50, initiating an upward move. The price is now exhausted and has hit the resistance area of around $35. However, the strong price action on Tuesday indicates further upside. Any price resistance between $35 and $36 may initiate the correction back to $32.50. However, a break above $36 may continue to advance towards $43.

Silver 4-Hour Chart – Breakout from Inverted Head and Shoulders

The 4-hour chart for silver also shows the formation of an inverted head-and-shoulders pattern. The price has broken the neckline of this pattern at $32.50, initiating an intense and rapid move. The price is now in a highly overbought region, and a correction from this level is needed to fuel the next rally.

EUR/USD Technical Analysis

EUR/USD Daily Chart – Approaches Support of Ascending Broadening Wedge

EUR/USD is approaching strong support in the $1.0790 to $1.0770 region. The US dollar index has broken above 103.90 but remains extended on the daily and 4-hour charts. Therefore, if the US dollar corrects lower, EUR/USD will likely rebound from this support level. On the other hand, a break below $1.0770 will breach this support and lead to further downside.

EUR/USD 4-Hour Chart – Bearish Pressure

The 4-hour chart for EUR/USD shows bearish pressure and remains oversold. A rebound from these levels is likely. The price is still under bearish solid pressure, but a rebound above $1.0875 will ease this pressure on the 4-hour chart.