Gold, Oil and EURUSD Weekly Analysis - Week 22

Gold closes flat as bias mixed

The precious metal was seen extending some modest gains on Friday last week. Price action settled back close to the 1285 handle marking another modest test of the resistance level.

The Stochastics oscillator based on the daily chart signals a potential move to the upside unless we see a move lower. While the overall bias in gold remains to the downside, there is scope that the precious metal could breakout higher.

Watch for a potential break above 1285 which could see the upside bias taking hold. This will invalidate the head and shoulders pattern that is currently evolving.

Crude oil rebounds off the support

After extending declines for nearly three consecutive days, oil prices rebounded to close bullish on Friday. The gains come as price tested the lower support of 57.50. However, the sharp rebound could see oil prices falling back to this level to test the support more firmly.

To the upside, the minor resistance level at 60.64 will potentially act as resistance keeping a lid on the gains. A close above the 60.64 level could see oil partially rising to test the previous highs near 63.00.

In the near term, oil prices could remain caught within the range. Unless oil prices break down below 57.50, we expect price action to remain flat with the possibility of a move to the upside.

Euro testing the resistance area

The euro currency was seen testing the resistance area of 1.1224 – 1.1200 region by Friday’s close. The gains came following two days of rally which has pushed the price of the common currency back to the resistance area.

If the EURUSD manages to breakout above this level, then we expect the common currency to once again extend back into the previous range it was trading at. The upside resistance at 1.1395 will remain in sight.

However, failure to break the resistance area could keep the EURUSD subdued. The range within 1.1200 and the previously established lows of 1.1150 could remain in play.