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Gold, Oil and EURUSD Weekly Analysis - Week 29

Gold logs fifth consecutive weekly gains


The precious metal is on track to mark a fifth consecutive week of gains. Prices were little changed as gold settled above the $1800 level rather comfortably. The mood in the markets remain mixed amid the record surge in Covid-19 cases in the United States. As a result, the US dollar also slipped, giving gold prices the upper hand.

Following the upside breakout from the consolidation range of 1730 - 1683, the precious metal has moved higher and within the bullish price channel. The daily price action indicates an inside bar forming for nearly two consecutive days. This could potentially signal a breakout in the near term.

As a result, watch for a breakout within the limits of 1817.79 and 1791.29. While to the upside, we could expect a move toward the 1850 handle, to the downside, there is scope for a larger correction. The previous resistance level near 1730 could be retested for support.

Oil prices look forward to the OPEC+ meeting this week

WTI 1307

Crude oil prices managed to recover from Thursday's slump into the close of the trading week. Oil prices rose following the International Energy Agency (IEA) raising the demand forecasts for 2020. The IEA expects demand to be around 92.1 million barrels per day (bpd), lifting the forecasts from 400,000 in its outlook from the month before.

OPEC members are also scheduled to meet this week on July 15th to discuss further supply cuts. As a result, we expect to see volatility rising in the coming days. For the moment, oil prices are capped by the 200-day moving average. A breakout above this level will see the 42.00 resistance also limiting the gains.

As a result, any gains will need to be driven by strong fundamental news. A close above the 42.00 level and the moving average will confirm a move toward the 50.00 level eventually for crude oil prices. Watch the ascending triangle pattern which gives the bias to the upside.

Euro holds steady but a big week awaits


The euro currency continues to drift sideways with price action trading rather flat. However, this could change ahead of the ECB meeting this week. However, the central bank is unlikely to tweak its monetary policy which could leave the euro to remain trading flat.

For the moment, the 1.1300 level being tested once again. A weekly close above this level could suggest a continuation to the upside. The next target will be at the 1.1400 level of resistance. But in the event that price fails to move any higher, we could expect to see the euro falling back to the 1.1200 handle.

Given that this support level might hold, we could expect prices to trade in a range within these levels. A close below 1.1200 will see the EURUSD slipping toward the 1.1147 level of support which has not been tested just as yet.

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