Gold, Oil and EURUSD Weekly Analysis - Week 33

Gold prices retreat from all-time highs


The precious metal was down over one percent on Friday. the declines came just after the precious metal hit a new all-time high record near 2074.98. It also marks the first solid decline in over five sessions. But the declines might likely be due to investors booking profits and ahead of the US fiscal stimulus package talks.

While it is still too early to confirm if gold prices will be posting a correction, Friday's bearish engulfing pattern indicates a possible move lower. For now, the 2040 handle is the key. A daily close above this level will indicate that the bullish momentum is back on. But given the positioning of the Stochastics, this might just be the case.

Alternately, if we see a continuation of the declines, then gold prices might be heading lower. The key level of interest will be the 2000 handle initially. Only a firm close below this level will indicate that there might be further declines in store

WTI crude oil extends declines for two sessions

WTI 1008

Oil prices attempted to breakout above the 42.00 handle earlier last week. But soon thereafter, prices fell back, erasing all the gains made. Oil prices settled near the 41.50 handle into Friday's close. The declines were driven by a bout of strength in the US dollar.

For the moment, oil prices are supported back near the 200-day moving average. This could mean that price action could remain in a sideways range for the short term. A breakout from these levels could signal a move in one of the directions.

With the Stochastics oscillator pointing downward, we expect to see a move lower. If oil prices lose the support from the 200-day moving average, then we might get to see some near term declines further. Price action could very well slip to the 50-day moving average which sits around the 40.00 region.

EURUSD likely to be forming a top


The common currency was down about 0.75% on Friday. The declines came right after the euro attempted another shot to close above the 1.1900 handle. However, with two attempts failing, the euro currency posted declines to close below the 1.1800 level.

Considering the fact that the EURUSD has failed to make any meaningful pullbacks so far, we expect to see the correction take place. The main support area is near the 1.1600 level. Establishing support here will still see the bias remain to the upside.

But in the event that the currency pair loses this handle, then we expect a correction all the wa down to the 1.1400 level. Given that a weak double top pattern formed near 1.1900 handle, the minimum downside is toward the 1.1500 level at the very least. But this can only be confirmed is EURUSD closes below the 1.1700 region.

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