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Gold, Oil and EURUSD Weekly Analysis - Week 29

Gold rally likely to pause

Gold 1507

The precious metal closed last week near the highs after the strong rally that was seen in the consecutive weeks before. With prices stalling near the highs, the gains in the precious metal look to have stalled for the moment.

Gold prices are likely to remain in the sideways range that is set between 1420 and 1380. A breakout from this level will see the direction of the next leg in the trend. The bias remains balanced for the moment.

An upside breakout above 1420 will likely see more gains coming. This will push gold to highs of 1500. Alternately, a downside breakout below 1380 will signal a correction to the 1320 level of support. A retest to this support level will be seen as a healthy correction ahead of further gains to the upside.

Crude oil closes flat

WTI 1507

Oil prices closed on Friday with a doji candlestick pattern just below the key resistance area of 60.65. A bearish close is required in order to confirm the downside. But at the same time a breakout above 60.65 will potentially see oil prices maintaining the bullish trend.

An upside continuation will push oil prices to the next resistance level of 63.00. This would push oil back to the May 2019 highs. In the near term however, we expect oil prices to maintain a sideways range within the 60.65 and 57.50 levels of support and resistance.

The lower target near 50.00 still remains an option. However, it will depend on how the fundamentals develop. The key issues surrounding Iran continue to support higher oil prices. This, alongside the production cuts at the moment support the view to the upside in oil.

EURUSD attempts to recover higher

EURUSD 1507

The common currency has maintained a flat range within the 1.1400 and 1.1200 levels. By Friday, the currency pair was seen attempting to reverse the losses from earlier in the week. The support area near 1.1224 and 1.1200 remains a key level of interest.

The EURUSD is likely to form a head and shoulders pattern at the current lows. Watch for the right shoulder to form. If EURUSD reverses, forming a lower high, then we could anticipate further declines.

The support area of 1.1224 – 1.1200 will be crucial for the currency pair. A breakdown below this neckline support will trigger further declines in the near term.

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