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Gold, Oil and EURUSD Weekly Analysis - Week 35

Gold prices weaker after last week's declines

XAUUSD 2408

The precious metal closed on a slightly bearish note last week and this comes after prices fell sharply the week before. Following the rally to the 2050 level, the precious metal gave back the gains rather quickly. A modest rebound saw gold prices making a lower high just above the 2000 level.

For the moment, the 2000 level gains importance. A close back above this level could indicate that the precious metal is resuming its bullish trend. To the downside, the support level near 1900 will be critical. So far, this support level has held up.

But if gold price slip back to this support area, then we expect to see a deeper correction in the making. Right below the 1900 level of support, the next big price level to watch is the 1850 handle. A close below 1850 will send gold prices down to the 1750 handle next.

WTI crude oil closes the week flat

WTI 2408

Oil prices did not make any major gains or declines last week as price action into Friday saw oil prices closing flat. This comes following two back to back weeks of modest gains. From the weekly chart, the outlook for oil prices is bullish as the market is in an uptrend. However, with price action failing to make any major headway, we could see a possible correction in the making.

If oil prices close on a bearish note this coming week, then we expect to see a major correction happening. From the daily chart, the 200-day and 50-day moving averages are also quite flat and these could offer some kind of support to oil prices from posting further declines.

A strong breakout to the upside is needed to confirm further gains. The next big major level will be the round number resistance near 50.00, followed by the support level at 55.00. To the downside, oil prices will be testing the 42.00 level. A weekly close below this level could indicate a move to the downside.

EURUSD stalls at 1.1800

EURUSD 2408

The euro currency has closed the week on a bearish note, but price action is holding up near the 1.1800 level of support. This comes right after the bearish divergence seen on the daily charts. For the moment, the support level near 1.1700 remains critical. A breakdown below this support could signal a correction lower.

The ECB meeting this week is the big-ticket item for the euro. The ECB is contemplating on announcing further easing measures. The EURUSD could potentially turn volatile in the run up to the ECB meeting this week. Last week, flash PMI numbers from the Eurozone showed that growth recovery is still soft. This potentially raises the odds of the ECB announcing easing measures at this week's meeting.

If the EURUSD breaks down below 1.1700 level, then we expect price action to fall toward the 1.1600 which is a major support area. A rebound off this level could keep price supported to the upside for the short term. But if the euro does not trade back above the 1.1950 level, then we expect to see prices settling into a range or moving lower.

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