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Gold, Oil and EURUSD Weekly Analysis - Week 10

Gold prices set the bearish tone

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Gold prices fell sharply on Thursday and Friday last week. The declines on Friday were much more pronounced as prices fell past the 1300 level and settled near $1292.97 level. The breakdown below the 1300 level indicates that further bearish declines could be expected if the momentum continues. The next main support is seen at 1280 handle.

In the near term, the Stochastics on the daily chart is signalling that the momentum is likely to continue, however, we expect the declines to stall near the 1280 level of support. A rebound off the 1280 level could see prices likely to retest the 1300 level where resistance could be formed.

For the week ahead, we expect gold prices to maintain the bearish momentum with the bias to the downside increasing for the moment.

Oil prices break down

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WTI crude oil prices attempted to rebound but price action gave way on Friday. WTI Crude oil fell sharply after posting intraday highs of 57.60 and closed at 55.50. This marks a second attempt to rebound to the upside but was met with failure.

As a result, we expect crude oil to extend the declines to the downside. The next main support is seen at 54.00 handle. The consolidation near the highs has resulted in a rising wedge pattern with Friday’s price action indicating a downside breakout from this pattern.

This potentially confirms the downside in crude oil. Following the break down below 54.00 handle, oil prices could extend lower to test the 52.50 level. While a retest of the 50 level would be ideal, oil prices could be seen maintaining the range near the current levels. For the moment, the upside bias remains exhausted.

EURUSD fails to maintain the momentum

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The common currency, which managed to gradually post some gains was seen easing by Friday’s close. Price action over the remained choppy with upside being rejected on a daily basis. After posting an intraday high toward 1.1408, the EURUSD currency pair turned bearish for a second consecutive day.

In the near term, the bearish bias could see the EURUSD extending the declines down to the previously established support at 1.1312 - 1.285 level. Retesting this level for support could keep the common currency subdued in the near term.

Price action on the longer horizon remains weak and is seen consolidating within the triangle pattern on the daily chart. As long as price remains within the confines of the triangle pattern, we do not expect to see the EURUSD making any major gains.

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