Gold, Oil and EURUSD Weekly Analysis - Week 19

Gold prices rebound modestly off support


The precious metal closed with modest gains, rising 0.89% on Friday. Although the European and some parts of Asia were closed due to the May 1st bank holiday. The rebound off the 1680 technical support suggests that traders are looking for bargains, as gold continues to remain in demand given the current market outlook.

With prices being strongly rejected near the 1680, a minor support level is emerging. In a way, this signals a possible double bottom pattern. However, for this pattern, which is bullish, to qualify, gold prices need to close above the previous highs of 1730.

If the bullish momentum continues, then gold will need to break past the 1730 level to confirm the double bottom pattern. This puts the minimum upside in gold toward the 1780 level. It would also mark the bullish flag pattern which is still in play. This pattern projects the upside in gold to the 1820 level at the very least.

WTI Crude oil prices rise for four consecutive sessions

WTI 0405

Crude oil prices continue to maintain the bullish outlook led by the OPEC+ production cuts which are now in effect. Price action has been rising for nearly four consecutive sessions, following the bullish fundamental developments. However, price action could continue to remain volatile in the near term.

Prices are now trading close to the 20.00 level where resistance could keep prices from rising higher. Therefore, oil prices need to breakout firmly above this level in order to maintain the rally. Failure to breakout above 20.00 could potentially keep oil prices to consolidate sideways.

Above the 20.00 level of resistance, oil prices will be targeting the 28.00 handle. This marks the measured move from the double bottom pattern that has formed in prices. To the downside, the lower support level of 13.15 remains critical. If prices break below this level, we expect oil prices to potentially push back to the previous lows.

Euro posts modest gains, but can it break the range?


The euro currency posted gains for three consecutive sessions last week. As a result, price action briefly tested the resistance level near 1.1000 before easing back into Friday’s close. The gains in the EURUSD comes on the back of the markets adjusting to a rather neutral ECB stand and the dollar giving back some of the gains.

For the moment, despite the gains, the EURUSD remains range bound within 1.1000 and 1.0784 levels. Given that the lower support has been tested twice, there is scope for price action to breakout higher. The Stochastics oscillator however signals to a possible pullback.

Therefore, watch for the EURUSD to potentially form a higher low. This could indicate that price action could be breaking out higher. A strong close above 1.1000 is needed to confirm further upside in prices. The next main resistance level is at the previous pivot high of 1.1147.

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