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Gold, Oil and EURUSD Weekly Analysis - Week 27

Gold prices stay volatile near the top

Gold 0107

The precious metal was seen to be choppy near the top end of the rally with price closing flat for a second consecutive day. However, prior to the close, gold continued to move around to test intraday highs and lows.

The volatility in the gold prices come as the G20 summit takes place. President Trump and Xi are expected to meet and discuss the U.S. and China trade talks. There is still no clear resolution to the issue.

From a technical stand point, the current volatility in gold could see prices crumbling lower if the initial support at 1400 gives way. This will open the downside to 1360 levels in the near term. Establishing support near the 1360 handle will keep gold prices still biased to the upside.

Oil prices tumble after failing to test 60

WTI 0107

WTI Crude oil prices closed bearish on Friday followed by the doji candlestick pattern formed the day before. OPEC meeting is due to start on Monday and Tuesday and oil traders await for further clues from OPEC on oil production cuts.

Rumors on Friday showed that OPEC members might continue with the existing production cuts into the end of the year. This marks no additional production cuts while Iran and Venezuela are cut off from the international oil markets.

Technically, WTI crude oil will be testing the lows of 57.50 which previously acted as resistance. If support is established here, oil prices could rebound to the upside to test the highs of 60 and beyond.

Alternately, if the 57.50 support fails, then oil prices could fall further. This would push oil back within the range of 57.50 and 50.00 levels. We expect crude oil to drift within these levels in the near term, with a potential test to the 50.00 level.

EURUSD remains directionless

EURUSD 0107

The common currency closed a third consecutive day with flat price action. The indecision comes with the EURUSD trading just below the main resistance area of 1.1400 region. This potentially indicates a mixed bias.

There is scope for the EURUSD to breakout in either direction. To the upside, a close above 1.1400 level could potentially open the gains in the EURUSD to test the highs of 1.1623. However, for this to occur, EURUSD will need to form strong support at the 1.1400 level.

To the downside, the lower support area of 1.1224 – 1.1200 will most likely hold the declines. Overall, the currency pair remains trading flat within the overall range of 1.1400 and 1.1200.

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