Gold, Oil and EURUSD Weekly Analysis - Week 03

Gold settles into the range

Gold 140119

Gold prices settled the week staying afloat above the 1280 handle. Price action is clearly seen trading flat at this level over the past few daily sessions. The sideways range is likely to see gold prices reacting to either sides.

To the upside, the 1300 round number resistance level remains within reach and could be achieved on any undiscounted news hitting the markets. To the downside, a technical correction to the 1250 remains on the cards. However, with the 1280 support holding up so far, it is evident that price action could remain flat for the near term.

Still, selling gold at 1300 or going short on a break below 1280 remains the play, targeting the 1250 handle. A decline to the this support level will keep the upside bias intact and could potentially pave way for the next leg in the rally to the upside.

WTI closes week with declines

WTI 140119

WTI Crude oil prices were seen posting a decline towards Friday's close. The declines come after price briefly tested the 53 handle. This remains a minor resistance level that was previously tested around mid-December 2018. Failure to breakout higher and the subsequent breakout from the rising median line indicates a potential pullback to the rally.

On the daily chart, price action closed with a doji on Thursday followed by a bearish close on Friday. The Stochastics oscillator is signaling a hidden bearish divergence adding to the downside bias.

The initial support is seen at 50. Given the round number significant of this level we expect buying pressure building up at this level. Unless there is a rebound offered at the 50 level, oil prices could be seen at risk of posting a sharper pullback to the lower support at 46.50 - 46.00 region.

For the moment, watch for oil prices to post some consolidation at the current highs around the 53 handle. A lower high formation following the downside breakout could signal a move targeting the 50 level at the very least.

Will the euro maintain the 1.1450 support?

EURUSD 140119

The euro currency broke out from its sideways range within 1.1450 and 1.1200 briefly. By Friday's close, the common currency was seen giving up most of those gains inching closer back to the 1.1450 level which is now likely to be tested as support.

Given that the upside breakout as validated the ascending triangle pattern, the EURUSD is expected to post a reversal at 1.1450 level. The ascending triangle pattern gives an upside target to 1.1700. This could be the case if the euro currency manages a successful reversal at 1.1450. This could also validate a potentially new leg in the change of the trend in the euro currency.

Above 1.1700, the euro currency could be seen extending the gains toward 1.2200 region over the next couple of months. To the downside, if the euro fails the support at 1.1450, then we can expect price to extend lower but find dynamic support off the falling trend line that was breached to the upside recently.

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