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Gold, Oil and EURUSD Weekly Analysis - Week 30

Gold settles for a sixth consecutive weekly gain


The precious metal recovered on Friday to close for the sixth consecutive weekly gains. The move comes as a rise in coronavirus cases increase across the US. This has fueled demand for safe haven assets. Furthermore, the tensions between US and China has also pushed investors to seek the safety of the precious metal.

With the bullish close, gold prices are back near the previous highs. Price action needs to make a strong break above the 1810 level to continue further to the upside. Failure to post a new high could signal that the consolidation will continue.

This potentially exposes the risk to the downside. The short term support is at the 1800 level, but a break down below this level could signal a move to the 1750 handle where prices will most likely test for support.

WTI crude oil steady amid recover hopes

WTI 2007

Oil prices were trading soft on Friday as investor concerns shifted between stimulus expectations and a second wave pandemic. Oil demand is expected to take a hit and as a measure, OPEC leaders met over the week to cut production. However, oil prices fell over 1% in response.

The price action in WTI crude oil remains broadly muted for the moment. Failure to breakout above the horizontal resistance of 42.00 and the 200 day moving average is keeping price action subdued. This is likely to continue in the near term.

The ascending triangle pattern could however give hopes for an upside breakout in the oil markets. But for this to occur, oil prices must breakout strongly above the said levels. To the downside, the lower support area near 38.00 remains the downside target in case of a correction.

Euro settles at a 4-month high ahead of EU summit


The euro currency closed at a four month high into Friday's session. The gains come on hopes that EU leaders will make progress on the recovery fund in order to lift the EU out of a recession. The meeting is expected to continue into the weekend but investors do not expect any major outcomes right away.

The common currency, after posting losses on Thursday managed to recover off the support near 1.1374 on Friday. The bullish close on Friday indicates that further gains might be in store. The next target for the EURUSD is at the 1.1500 level.

To the downside, the declines are now limited to the support area of 1.1374. But in the unlikely event that the euro closes below this level, then expect the gains in recent days being wiped out. The next lower support level is seen at the 1.1147 support.

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