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Gold, Oil and EURUSD Weekly Analysis - Week 36

Gold turns bearish for the second week

Gold 0909

The precious metal closed with losses for the second consecutive week. This came after prices maintained a healthy bullish trend. The reversal off the highs near 1557 saw prices turning lower by Friday’s close.

With gold prices clearing the initial support at 1522.78, we expect to see the declines to continue. However, in the near term, watch for price to retest this level in order to establish resistance. If a top is formed by means of a lower high at 1522.78, then we expect to see further declines.

To the downside, gold prices will see a possible correction to 1440 handle. This is however subject to the trend and the momentum. There is scope for a sideways range to be formed mid-way ahead of the declines into the support area. Alternately, if gold manages to close above 1522.78, we could expect to see the bullish momentum prevailing.

Oil prices maintain consolidation phase

WTI 0909

WTI Crude oil prices continued to remain flat in the longer term horizon. Price action managed to close two consecutive days with bullish gains. As a result, oil prices managed to recover above the 56.00 handle.

In the medium term outlook, oil prices are trading within the symmetrical triangle pattern. As a result, there is scope for an upside bias building up. The next main resistance is seen at 60.64 region. A retest of this level to establish resistance will cap the gains for the moment.

In the meantime, watch for prices to retest the breakout area near 56.00. A retest of this level as support will give a more convincing upward bias in crude oil prices. Overall, oil prices remain bearish, having closed in the red for two consecutive months. Therefore, there is scope that the upside bias might stall at 60.64 with the downside opening up.

EURUSD remains anchored near two-year lows

EURUSD 0909

The common currency closed on Friday with a doji pattern. Overall, the price action over the past week shows that while a bottom is formed, there is scope for further downside in the currency pair. The EURUSD has been trading subdued but still within a flat range.

Price action remains choppy. Currently, the EURUSD currency pair is seen holding up near the falling trend line. As long as this dynamic support level holds, we could expect to see some upside gains. The resistance area of 1.1129 – 1.1111 will likely cap gains to the upside.

With the ECB meeting due this week, and the prospects of a dovish monetary policy rising, there is scope that the EURUSD currency pair will most likely breakdown past the previously established lows.

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