EURUSD XAUUSD Market Insight

EUR/USD  

The European Central Bank is unlikely to raise interest rates again after euro zone PMI showed clear signs that the euro zone is heading into recession. The high interest rate is slowing the economies of all euro zone countries, while tightening policies from central banks around the world mean exports will be unable to stimulate the economy. The ECB may adjust its economic forecast after assuming the euro zone would avoid recession in its latest forecast in September.  

 We can see moving average system has become significant resistance to limit potential price rebound on H4 chart. On the other hand, MACD double line is always running below zero axis, owing to euro zone unexpected economic data, investors tend to build short position in their long-term portfolio. Hence the suitable tactic of EUR/USD is to employ selling or sell limit, stop loss is necessary.        

XAU/USD 

The gold rebounded because the US dollar retreated from six-month high. The outlook for long term interest rate increases showed a weak prospect of gold, especially the Federal Reserve took a hawkish stance. However, the global demand for gold is still huge, and some countries are buying gold constantly. Gold assumes greater importance in non-western countries.    

 We can see gold tried to make upward breakthrough but failed. On the other hand, MACD histogram bar and double line is unsuccessful to constitute golden cross on H4 chart, it is sign of potential retracement. If FED decides to raise interest rate in future, the gold will access into downtrend. The acceptable strategy is to set sell limit around 1930, stop loss is compulsory.