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Gold, Oil and EURUSD Weekly Analysis - Week 12

Watch the bearish flag pattern in gold

Gold 1803

Gold prices reversed the gains from the week before as price action was seen retesting the highs near 1308 level. The reversal has put price action in a consolidation phase with Friday’s price briefly testing the highs after slipping to the 1300 level briefly.

This potentially marks a bearish flag pattern that is still forming. A break down below the 1280 handle will trigger further declines in gold as the bearish flat pattern is validated. The minimum downside target is expected at 1240 level.

The daily Stocahstics is currently seen weaker and could signal weakening momentum which could cap the gains to the upside. However, if gold prices push higher and close above 1302 level we could expect price to test the 1320 level at the very least.

Crude oil prices settle with a doji pattern

WTI 1803

WTI crude oil prices closed the week near the highs above 58.00. Friday’s price action closed with a doji marking a two consecutive session which saw similar price action. The indecision near the top could potentially trigger a move to the downside.

This would mark the much needed correction in oil prices. A bearish follow through is required in oil prices to confirm this bias. The lower support at 54.00 remains a key level of interest that could be tested. However, given the past consolidation at this level, we expect that the declines could push lower to the 50.00 level.

Establishing support at the round number level could mark a retest of this level. This will improve the odds for oil prices to extend gains to the upside as a result. Alternately, if the momentum regains speed, then oil prices could be seen attempting to test the 64.00 level of resistance in the medium term.

EURUSD continues to consolidate


Price action in the EURUSD currency pair remains choppy with the currency pair not letting go of the consolidation. By Friday’s close, the EURUSD currency pair was seen attempting to break out from the support level but after a brief test to intraday highs, the common currency fell back.

In the near term, we expect this sideways range to continue for the EURUSD. However, with the support level near 1.1312 - 1.1282 region, the common currency could be seen holding the gains for the moment. The upside target is seen at 1.1450 region which remains the key upside target which hasn’t been tested in recent times.

The downside risks look to be clear for now, but a break down below the support area could push the EURUSD back to testing the previous lows at 1.1200 level.

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