Gold, Oil and EURUSD Weekly Analysis - Week 24

Gold falls back to lower end of range


The precious metal was weak on Friday after the strong US jobs report saw risk appetite rising. This pushed price lower and gold gave back the modest gains it made on Thursday. Into Friday’s close, gold was down nearly 1.7% as prices hit the lower end of the range.

The move to the downside puts gold back at the familiar support area of 1684. Price action has been stuck in this range since early April this year. Therefore, if this support holds up, then we could expect to see prices moving back up, but within the established range. The upper end of the range is near 1730 levels.

However, if there is a breakdown in prices below 1684, then gold prices would be starting a correction. The next lower support is seen at the 1642.00 handle. A correction to this level will remain within the longer term uptrend and could see new buyers coming into the market.

Oil prices rise over 4% on OPEC production cuts

WTI 0706

WTI Crude oil prices resumed their bullish trend on Friday after OPEC+ countries sorted out their differences. OPEC, led by Saudi Arabia and Russia are set to extend production cuts into September, extending it by another month. This is seen as a bullish sign for oil prices.

The news saw oil price recovering from uncertainty in the previous sessions. Following the doji candlestick pattern which formed two sessions ago, prices are now above this doji’s highs. This signals that the bullish momentum is back in play.

Oil prices are now within reach of the 42.00 level. This will mark a nearly full recovery in prices which, just a few months ago crashed into negative territory. However, the gains are likely to be done as prices approaches the 42.00 handle. We could expect to see some near term retracement off this price point.

EURUSD bearish after eight consecutive sessions of gains


The euro currency ended its strong eight-day gains on Friday after prices reached a new three-month high. The declines came as traders booked profits after a strong two-week rally. The fact that strong jobs report was also another factor leading to the bearish candlestick into Friday’s close.

Despite this bearish close on Friday, the bias strongly remains to the upside for the EURUSD. Unless there is evidence of a lower high forming, the EURUSD looks set for further gains. The next key price level to the upside will be the 9th March highs of 1.1446.

To the downside, we can see that the price level near 1.1147 will be the most likely price point that will be tested. A pullback to this level should be within means of a healthy retracement. Thus, buyers are likely to wait for price to dip to this level before renewing their bids.

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