Gold, Oil and EURUSD Weekly Analysis - Week 36

Gold pushes higher, paring losses from Thursday


The precious metal gained over 1.8%, heading into Friday's close. The gains came just a day after the U.S. dollar briefly strengthened on Fed Powell's speech. The current price action in the precious metal indicates that there could be more upside in gold. The key challenge is of course the price level of $2000.

To the downside, it is clear that the 1900 level is holding up as strong support. The initial dip below this level was met with strong buying activity that pushed prices back above the 1900 level. Following this, last week's decline close to 1900 was also rejected as prices moved higher.

But to the upside, gold is now forming lower highs. This is indicative with the descending triangle that is forming. Therefore, if price action fails to breakout above 2000, we could see gold correcting toward the 1800. Of course, this is subject to the precious metal giving away the 1900 support that held up for so long.

Crude oil trades weaker, pares gains

WTI 3108

Oil prices closed on Friday on a slightly bearish note. The declines came after earlier in the week, oil prices touched a new five-month high. The gains were onset by the threat of the Hurricanes in the Gulf of Mexico. This has forced oil producers to shut down operations. However, closer to the week, the threat from the hurricanes was not as bad.

This has led to a brief profit taking and has pushed oil prices to settle lower into Friday's close. Despite the declines, on a weekly basis, oil prices are now up for four weeks on a consecutive basis. With the 42.00 level being breached, the upside bias is building up.

Any near term dips could see prices testing the 42.00 level as support. This could potentially open the way for oil prices to rise toward the 55.00 level next. The market is also slowly shifting into a bullish market with the 50-day moving average, now trading close to the 200-day moving average.

EURUSD back to the upside


The euro currency closed rather flat on Thursday following the US dollar strength. This was right after the speech by Fed Powell. However, price action on Friday turned bullish with the EURUSD re-capturing the 1.1900 level. But prices have stalled just near this level into the weekend.

A breakout above 1.1900 is needed to confirm further upside The next big target for the EURUSD will be the 1.2000 handle. But for this to occur, price needs to breakout above the previous highs of 1.1965.

For the moment, the support level near 1.1800 is holding up. This could possibly suggest and even confirm that the bias is now to the upside. But there is also a risk for the EURUSD to maintain its consolidation within the 1.1965 and 1.1800 levels for the short term. A breakout from either of these levels will set the tone for the common currency in the near term.

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