Gold, Silver, EUR/USD Technical Analysis: Consolidation Ahead of Key Economic Data

EUR/USD is stabilizing within broad ranges near long-term support following a sharp drop after the US presidential election. This price consolidation reflects a similar pattern in the US dollar index, holding a strong resistance level of around 107. The market remains cautious, awaiting key economic data and policy insights that could influence the pair’s direction. Key focus areas include the final HCOB Services PMI data for Germany, the eurozone, and the euro area’s PPI. These reports are expected to provide critical insights into the region’s economic performance. Additionally, speeches by ECB President Christine Lagarde and member Cipollone might reveal further details about the ECB’s monetary policy.

However, the euro remains under pressure due to broader economic challenges. Market participants are particularly attentive to the upcoming US Nonfarm Payrolls (NFP) data, which could serve as a key driver for EUR/USD. A stronger-than-expected NFP report might strengthen the US dollar, applying downward pressure on the euro. Conversely, weaker results could offer short-term support for the currency pair.

On the other hand, the US dollar index (DXY) remains under pressure in the resistance area, supporting EUR/USD in its support zone. The market awaits the ADP Employment Change, ISM Services PMI, Factory Orders, and Federal Reserve Chair Jerome Powell’s speech. These developments could influence the dollar’s trajectory. Gold (XAU) and silver (XAG) prices remain muted and wait for the key US economic data for further direction.

Gold (XAU) Technical Analysis

Gold Daily Chart – Consolidation within Ascending Channel

The daily chart for gold shows that the price consolidates below the 50-day SMA, indicating a lack of clear direction. The price forms an ascending channel pattern and remains supported by the 100-day SMA, signalling an upward trend. However, the recent consolidation below the 50-day SMA suggests the potential for further correction before the next upward move. Additionally, the RSI remains below the midline, indicating a likelihood of continued corrective pressure. The release of employment data this Friday is expected to provide further direction for the gold market.

Gold 4-Hour Chart – Price Consolidation

The 4-hour chart for the gold market shows price consolidation above the support level at $2550. The RSI is also stabilizing around the mid-level, indicating a lack of clear direction for the gold market. A break below $2,550 would negate the bullish momentum.

Silver (XAG) Technical Analysis

Silver Daily Chart – Ascending Channel

The daily silver chart shows bullish momentum within an ascending channel pattern. The formation of a bullish hammer and positive price action at support suggests that the price may continue higher. The price remains above the 200-day SMA, indicating an overall upward trend. However, the RSI is near the mid-level, and the price challenges the 50-day SMA. A break above $32 would trigger the next move higher and push the RSI above the mid-level. Conversely, a break below $29.60 would negate the bullish momentum in silver.

Silver 4-hour Chart – Inverted Head and Shoulder

The 4-hour chart for silver shows the formation of a descending broadening wedge pattern, with the price finding support at $29.60. The rebound from $29.60 has formed an inverted head and shoulders pattern, indicating a positive development. The immediate resistance within the descending broadening wedge lies in the $32.20-$32.50 zone.

EURUSD Technical Analysis

EURUSD Daily Chart – Strong Volatility

The daily chart for EUR/USD shows the price has approached the long-term support zone at $1.047. This level was reached as the US dollar hit its long-term resistance at 107. Significant volatility is evident around this zone following the break of the ascending broadening wedge pattern to the downside after Trump’s victory. If EUR/USD fails to hold this support zone, it could continue long-term downward momentum.

EURUSD 4-Hour Chart – Descending Channel

The 4-hour chart for EUR/USD shows that the price is trading within a descending channel. If the pair breaks above the $1.0600 level, the rebound within this channel appears bullish. If the pair breaks $1.06, the next resistance will be around the $1.0700 area.