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Gold, Oil and EURUSD Weekly Analysis - Week 17

Gold prices fall and likely to correct lower

XAUUSD 2004

The precious metal fell sharply on Friday right after prices failed to capitalize on the gains earlier last week. Failing to post new highs, gold prices are down over 1.90% into Friday’s close. The declines come as investors brace for the global economy to slowly limp back to normalcy.

Talks of a possible vaccine against the Coronavirus also helped the equity markets to push higher. Thus, investors lost the appetite for gold. With prices closing below the 1708.50 level, we now expect a move lower.

Any near-term gains could see the 1708.50 level being tested for resistance. A reversal here could signal a move lower. The next downside target is at the 1643 level where support will most likely form.

Oil prices fall to an 18-year low

WTI 2004

WTI Crude oil prices fell to a new 18-year low on Friday last week. This marked another big weekly drop in the commodity. Oil prices fell to lows of 18.44 on Friday before pulling back to close at 28.66. The declines come on the back of weak demand for Crude oil as the global economy is now confirmed to head into a recession.

The decline in oil prices comes as the lower support at 20.00 was breached on Friday. This could push oil prices much lower in the coming sessions. Some analysts estimate that oil prices could fall to lows of 16.00 given the current outlook.

For the moment, the bias remains mixed as the Stochastics oscillator is in the oversold levels. This could suggest a possible pullback in the near term. But the price level near 20.00 could now come in as resistance and keep a lid on any gains.

EURUSD recovers slightly from the sell off last week

EURUSD 2004

The euro currency posted some modest gains on Friday, rising about 0.33% into the close. This comes after the common currency fell sharply over the week. The declines in the euro currency comes as the Eurozone economy is expected to be badly affected by the virus lockdown.

The dollar strength is also a major concern as the euro is unable to maintain a solid footing. Friday’s rebound comes just close to the lower end of the floor at 1.0784. But this rebound could mean nothing as price action will most likely stay flat.

The upper end of the range at 1.1000 will most likely act as resistance keeping a lid on any gains. The overall price action in the EURUSD remains flat with no direction in sight, albeit the trend is biased to the downside.

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