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Gold, Oil and EURUSD Weekly Analysis - Week 16

Gold prices sit at a critical level

XAUUSD 1304

The precious metals market was closed on Friday due to Good Friday holiday. Therefore, price action was muted. Heading into Thursday’s close, gold prices settled near the 1680 handle, where resistance is identified. Although prices moved slightly higher above this level, the following price action will be interesting.

If gold prices breakout above the 1680 handle and with a convincing bullish momentum, then we expect the precious metal to move to fresh highs. There is scope that the current momentum will see gold rising as high as 1800, a level not seen since 2011.

But the current gains also exposes the risk of a downside correction. Gold prices haven’t established any major support in the near term. We expect that the pullback could see gold retreating back to the 1620 levels in the short term. However, the overall price action in gold remains bullish.

Oil prices pullback, but a breakout is possible

WTI 1304

Crude oil prices failed to breakout above the 28.00 handle on Thursday. Oil markets, just like gold was also closed on Friday due to the bank holiday. Failing to breakout above 28.00, oil prices retreated lower into Thursday’s close.

The current declines could be seen as oil trying to find a bottom. But price action could remain range bound within the 28.00 – 22.00 levels. As long as the lows of this range is not breached, we expect prices to remain flat. But a downside breakout could trigger fresh declines.

Watch how price action behaves within this range. A higher low formation within the 28 and 22 region could signal a move higher. The initial target will be the 28.00 level once again. But following this breakout, oil prices could be testing the 42.00 level in the near term horizon.

EURUSD rebounds of the lower support

EURUSD 1304

After the euro currency fell to the lower end of the support level at 1.0784, price action has quickly rebounded. This has led to some short term gains in prices. Given the current momentum, it will be easy for the EURUSD to head back to test the 1.1000 level of resistance.

But unless there is a breakout of either 1.1000 or 1.0784, we expect the currency pair to continue drifting sideways. Even an upside breakout will see the next local pivot highs or lows coming in as levels of resistance or support.

As a result, the EURUSD will continue to remain trading sideways. The overall range is within the 1.1400 and 1.0700 level. Unless there is a continuation, above or below these levels, the currency pair could be trading flat.

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