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Gold, Oil and EURUSD Weekly Analysis - Week 23

Gold prices back at 1731 resistance

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The precious metal made gains for two consecutive days and ended on Friday back near the resistance level of 1731. The gains came on the back of a soft risk sentiment. President Trump’s announcement on revoking special status to Hong Kong saw investors taking a cautious view leading up to a slight rally in gold prices.

With prices now back at the resistance level, the bias remains mixed. There is scope for a breakout in either direction. But a strong close above 1731 is required for gold to make any further gains. But at the same time, the stochastics oscillator is making a hidden bullish divergence pattern.

This suggests that the bias is inclined to the upside. Therefore, a breakout above 1731 must be followed up by a higher high. Failure to do so could keep prices either subdued above 1683 level of support. We do not expect to see any immediate corrections in gold for the moment.

Crude oil prices rise slightly above the 35 price level

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Oil prices made most gains on Friday as prices managed to rise above the 35.00 price level. Oil prices are in a strong rally, but price action is showing slowing momentum. This indicates a mixed result as prices are at risk of a strong pullback.

The upper resistance level remains at the 42.00 handle, which could be reached quickly if the gains continue at the current pace. The overall range for WTI crude oil prices are between the 42.00 and 28.00 level at the moment. Therefore, price action could remain somewhat choppy.

But if the gains continue, then we expect price action to retreat as soon as oil prices hit the 42.00 level. There is a better prospect for a rally if oil prices manage to establish support near the 28.00 handle. This will validate the upside bias and could also attract new buyers into the market.

EURUSD rises for four consecutive sessions

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The euro currency rose for four consecutive sessions as on Friday, price action hit the price level of 1.1147. However, the pullback from this level was just as quick. Despite the gains made, the bias remains soft as the EURUSD could be at risk of a pullback.

With the 1.1000 level that was cleared recently, a drop back to this level will be ideal. If support forms here, then we could expect the EURUSD to post further gains on a successful breakout above 1.1147. This resistance level will be critical as a breakout above this level could signal further gains to come.

To the downside, the 1.1000 level will be critical. If prices breakdown below this level then we could expect to see further declines. It will also put the EURUSD back into its sideways range. For the moment, watch how prices react within the 1.1000 level of support and 1.1147 resistance.

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