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Gold, Oil and EURUSD Weekly Analysis - Week 19

Gold finds support off the long term trend line

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Gold prices rebounded on Friday as price action managed to retrace the losses from Thursday. The rebound in the price coincides with a weaker ISM non-manufacturing PMI and the dynamic support off the rising trend line. Despite the rebound however, gold could remain subdued for the moment.

This comes as gold prices could likely test the previously breached support level at 1290 – 1285 region. Price initially tested this level for resistance before extending the declines down to 1268 levels. The short term bounce in price needs to be closely watched for now.

If gold maintains the bullish moment, we expect a retest of the resistance level. If this resistance gives way, then the bias in gold could shift to the upside and would open the way for gains toward the 1320 handle.

Crude oil could rebound to 63.00

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Oil prices fell sharply on Thursday as price broke out from the rising price channel. However, on Friday, oil prices were seen closing in the green, albeit with modest gains. This potentially puts oil prices on track to test the 63.00 region in the near term.

The rebound to the 63 handle comes as the level briefly served as support. Establishing resistance here could potentially set the stage for further declines in oil prices. As long as oil does not break past the previous highs, we expect the bearish bias to take over.

A decline to the 57.50 region could be seen as the next move in oil prices. However, watch for the minor support at 60.00. This could offer a short term rebound in crude oil prices, but the overall bias remains to the downside for now.

Is the euro getting ready for an upside breakout?

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The euro currency continues to remain caught in a sideways range. Only thing worth mentioning is that this range been consolidating into a smaller range. This view comes as the EURUSD has been chalking out a consolidation pattern.

After slipping to slows of 1.1150, the euro currency has no doubt surged higher. Price action settled at the resistance area of 1.1224 – 1.1200 region. As long as this resistance area holds, the euro could remain muted and maybe weaken further.

However, the declines are likely to be seen losing the momentum. Watch for the euro to clear the resistance area noted earlier. If we see a weekly close above this region, then we anticipate some long term bullish trend emerging.

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