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Gold, Oil and EURUSD Weekly Analysis - Week 2

Gold prices on track to test September highs

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The precious metal rose for the fourth consecutive day. Gold prices gained over 1.5% on Friday, as the bullish momentum accelerated. The gains came as risk on sentiment overtook the markets. The news about the U.S. airstrikes killing a top Iranian commander set things in motions.

Given the upside prevailing in gold prices, we expect somewhat of a resistance forming at the 1556 region. If this level holds, then gold prices could remain trading flat. We expect prices to establish a new sideways range within 156 and 1523 levels.

Any signs of a retracement will see gold prices potentially retesting the lower support level near 1497 thereafter. Given that there are numerous support levels, the bias could remain to the upside. A breakout above 1556 will potentially set the stage for gold prices to test the $1600 mark.

WTI crude oil rises 3% on bullish fundamentals

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Oil prices surged over 3% on Friday. The gains were primarily driven by the U.S. and Iran tensions. At the same time, later in the day, the U.S. Energy Information Administration’s weekly crude oil report was also released. Data showed over 11 million in drawdown which beat estimates by a strong margin.

WTI Crude oil is currently in the resistance area of 63.00 and 60.64. We expect price action to remain in play within these levels in the near term. Oil prices initially touched $64.00 handle before retreating back into the sideways range.

The consolidation could see price action trading flat within the said levels. But if the upside bias builds up, then oil prices could be set for resuming the uptrend. To the downside, the risks will build up on a break down below the 60.64 region.

EURUSD gives back gains and settles into a range

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The currency pair has given up the gains made in the past weeks. Price action settled back to test the lower support of the range at 1.1130 region. The declines came amid the USD’s strength. The rising tensions have kept the USD supported amid a flight to safety.

It is quite likely that the EURUSD will maintain its flat trading within 1.1200 and 1.1130 levels. A breakout from this level is needed to confirm a potential breakout. If the upside bias fades, we expect to see prices retreating lower.

In the event of a breakdown below 1.1130 region, the euro currency could be pushing lower. The next downside target will be established on the breakout from the first minor rising trend line. However, the confluence of the horizontal support and the second rising trend line should keep prices support in the near term.

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