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Gold, Oil and EURUSD Weekly Analysis - Week 18

Gold rises slightly but bias remains mixed

XAUUSD 2704

Gold prices rose slightly into Friday’s close, although prices were bearish despite testing intraday highs. Price action was largely muted with not much happening. Given the way gold is position right now, we expect the bias to be mixed with the scope of a breakout in any direction quite possible.

To the upside, the bullish flag breakout suggests that there is further upside. The minimum upside target is seen at the 1860 level. But for this to occur, gold prices need to move higher with strong momentum. A close above the previous highs of 1740 will confirm this view.

Alternately, to the downside, failure to post new higher highs could see prices correcting lower. The 1708.50 level will be key for this aspect. A daily close below this level will suggest that price action could move lower. A close below 1708.50 will see gold prices falling to the 1643 level where support will most likely form.

WTI Crude oil remains muted

WTI 2704

WTI crude oil prices did not make much gains into Friday’s close, but price action was slightly bullish. Oil prices are still recovering following last week’s close below zero. Currently, there are still concerns of oversupply in the market which could suggest some downside bias.

Technically, WTI crude oil prices will be testing the resistance level of 20.00. A close above this level could suggest further continuation to the upside. Above the 20.00 handle, WTI crude oil will likely post gains to test the next main resistance level of 28.00.

To the downside, a reversal near the 20.00 will indicate that there is strong selling pressure. This will push oil prices back to the current lows. However, it will be difficult to estimate whether or when oil prices will slip back to the zero level. But overall, as long as the 20.00 resistance level is not breached, oil prices could be trading below this level.

EURUSD finds support for the moment

EURUSD 2704

The Euro currency pair posted modest gains into Friday’s close, rebounding off the support level at 1.0784. The rebound off this level suggests that there is strong buying interest. This will keep prices afloat for a while. As a result, the EURUSD currency pair might push higher in the near term.

But given the overall price action in the EURUSD staying flat, we expect prices to drift sideways. The upper resistance level of 1.1000 will continue to remain as a resistance level. Only a strong breakout above this level will confirm any further continuation higher.

To the downside, a close below the current support level of 1.0784 could trigger renewed selling pressure. This could risk the currency pair to post fresh lows. However, ahead of this, the euro currency will need to break down below the previous lows formed at 1.0700.

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