Gold - Destination next, 1280

Gold Technical Outlook, 10/12/2018

Gold prices have been creeping higher over the past month. Early price action indicates that gold prices have already posted a bottom after testing the lows near 1160 around August/September period.

Looking at the price action to the Ichimoku cloud, we see that the trend is currently to the upside.

On Friday, gold managed to break past the key resistance area of 1240. This level initially held the price gains around late October this year resulting in price posting a pullback to the 1200 level.

Friday's strong gains showed gold breaking past this level and it opens the way for a test of resistance at 1280. In the short term, we could expect a pullback to the 1240 level and perhaps some consolidation taking place at this level.

Traders should watch for how price action behaves around the 1240 region. As long as this support level holds, gold could expect to clear the way for a test toward the 1280 level, followed by a test to the 1300 level.

The gains in gold price comes amid talks about a late economic cycle and a possible recession in the coming year or by 2020.

WTI Crude - $50, the line in the sand

Crude Oil Technical Outlook, 10/12/2108

Crude oil prices posted a sharp and an unexpected decline after reaching highs of around $76.00 a barrel. The consecutive weekly decline sent crude oil prices crashing lower, pushing the commodity into a bear market.

Price is seen settling near the $50.00 handle for the moment, giving a temporary pause to the declines. While there is scope for a rebound off this level, a break down below this level could signal further declines.

In the event that crude oil prices clear the support at $50.00, expect oil prices to post further declines with the next support seen at $42.00 - $42.50 level.

Alternately, to the upside, the declines in oil prices come amid no pullback or a correction. Watch the price level near $58.00 which also marks the break of the trend line connecting the lows from February 2011 through June 2017.

A rebound off the $50 handle could easily push oil prices higher to test the $58.00 level which marks the breakout level from the rising trend line.

With the local high at $53.00 being formed, a close above this level could signal an upside move in price action.

EURUSD - Looks bearish

EURUSD Technical Outlook

The EURUSD currency pair has been consolidating for the most part since middle of November. Price is below the Ichimoku cloud and this signifies that the longer term downtrend is still in place.

The consolidation between 1.1500 and 1.1300 has turned out into a triangle pattern. When looked up in relation to the previous leg of declines, this potentially forms a bearish pennant pattern.

Therefore, a break down to the downside will suggest potentially big declines to come. The line in the sand is the support level at 1.1200 which has been tested just once. We expect a decline back to this level on a bearish move. A close below 1.1200 could no doubt send the EURUSD lower toward as lot as 1.0600.

Alternately, watch the EURUSD for any momentum led gains to the upside. Clearing 1.1500 could push the bias back to the upside. This could open the way for the common currency to test the resistance level at 1.1800.

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