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Gold, Oil and EURUSD Weekly Analysis - Week 34

Gold logs another week of gains

Gold 1908

The precious metal had ample reasons to maintain the rally amid a week that was capped with a lot of volatility and numerous themes playing out. The main reasoning being that investors are concerned about a possible recession due to the inverted yield curve. This led the safe haven gold to be bid higher.

On Friday, gold prices closed bearish near the top end of the rally. The Stochastics oscillator however remains well in the overbought level. Unless there is a move lower, we could expect gold prices to remain perched near the current highs.

The support level at 1500, which is currently a minor yet a psychologically key support level needs to be breached. A close below 1500 on a daily basis will confirm the move to the downside. The next support at 1440 will be tested in this scenario.

Crude oil outlook remains mixed

WTI 1908

Oil prices have been moving rather flat within the 56 and the 52 levels of resistance and support respectively. Unless there is a breakout from this range, we expect oil prices to remain caught within the range.

The fundamentals remain mixed at the moment with crude oil supply staying subdued amid speculation that demand will also remain weak. This has kept oil prices flat for the most part. But the sideways range could be seen breaking out sooner than later.

The bias remains mixed however. A strong close below the 52 region of support will send oil prices down to test the 50 handle. A retest of this level is required to confirm the downside correction. To the upside, above 56.00, we expect oil prices to possibly move higher toward the eventual test of 60 resistance.

Euro eases to previous lows

EURUSD 1908

The euro currency has been range bound in the longer term horizon. However, last week, price action fell to the previous lows. The EURUSD posted an intraday low of 1.1111 before modestly pulling back off the lows.

The declines could continue if the current bearish momentum is maintained. The euro currency could be seen testing the previously established lows at 1.1055. A breakdown below this level is required to confirm the bearish momentum and could see the EURUSD falling to new lows.

In the short term, price action could be seen attempting to retest the breached support area of 1.1111 and 1.1130. If this resistance holds, we could expect to see the downside prevailing.

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