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Gold, Oil and EURUSD Weekly Analysis - Week 14

Gold posts a dead cat bounce

Gold 0104

Gold prices attempted to rebound after reaching the support area of 1288. Price action initially posted a rebound that led to a short term correction on the price but by Friday’s close, the correction was seen giving back the gains.

From a weekly perspective, gold prices have closed with a bearish engulfing pattern, reversing the previous two weekly sessions of gains. Price needs to close below the lows of 1292 this week in order to confirm the downside.

On the daily time frame, watch out for the support at 1288 – 1280 region which could prove hard to break. Gold could remain biased above this level to the upside. A break down below will however accelerate the declines with 1250 as the next main target.

Crude oil settles higher

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Oil prices managed to push a bit higher by Friday’s close. This marks a fourth consecutive week of gains for oil prices. Price action could however continue to extend the gains to the upside. The 61.8% Fibonacci retracement level sits close to the 65 handle.

With no major resistance levels seen to the upside, we expect oil prices to continue the bullish trend toward the 65.00 handle. Price action is seen rising steadily within the rising price channel which indicates the uptrend.

In the short term, we see minor resistance level forming near the current highs of 60.00. A breakout above this level on a daily session is required to confirm the upside to the 65.00 level which will be the next key level of interest.

Euro could be looking for a break out

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The euro currency, from a weekly perspective has been consolidating into a descending wedge pattern. Price action has been currently bearish for two weeks. There is a risk that the euro could continue to follow through lower.

However, in the event that the EURUSD fails to break past the current support at 1.1224 – 1.1200, we expect to see a longer term upside bias building up. The EURUSD needs to breakout above 1.1395 in order to confirm this on a weekly basis.

In the near term, watch for price action as it could potentially signal a reversal near the current lows. We anticipate the sideways range to continue for a while before which, the EURUSD could give more clarity on the price action.

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