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Gold, Oil and EURUSD Weekly Analysis - Week 24

Gold closes the week with solid gains

Gold 1106

Gold prices continued their strong gains with price gaining as a result of weak monetary policy and global uncertainty. The gains for the week pushed gold prices to a one-year high and price action looks bullish.

In the near term, there is scope for gold prices to post a decline to the 1320 handle. Forming support at this level will potentially see further gains in store. On the weekly chart, the bullish flag pattern looks to have been validated.

This puts the upside target in gold toward the 1450 handle in the medium term outlook. The Stochastics oscillator, although in the oversold level is likely to trigger a bullish momentum in price, validating the upside bias.

Oil attempts to rebound

WTI 1106

Crude oil prices were seen posting some modest gains as price closed bullish for two consecutive days. The rebound comes following the formation of the inside bar pattern. The bullish breakout suggests a possible move to the upside.

The support level at 57.50 which was breached previously is likely to be the upside target if the bullish momentum is maintained. This will see a retest of this level for resistance. As long as the gains are not capped beyond the 57.50 level, we expect to see oil prices staying within the range of 57.50 and 50.00.

To the downside, there is of course the risk of a move toward the 50.00 handle. The current reversal just a few points above this level could indicate a potential move lower to establish support.

EURUSD breaks out from the falling trend line

EURUSD 1106

The euro currency was seen posting strong gains on Friday as price closed above the falling trend line. However, a follow through is required in order for the common currency to confirm the upside.

The upside target in the EURUSD is seen at the 1.1395 level. Resistance is quite likely to be formed here. Further gains can be expected only on a breakout above this resistance level. Failure to break out higher will keep the EURUSD back to trading sideways.

The downside support at 1.1222 – 1.1200 level is likely to hold the declines in the near term.

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