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Gold, Oil and EURUSD Weekly Analysis - Week 37

Gold trades flat, is there a rebound next?

XAUUSD 0709

The precious metal put a stop to its two day decline as prices closed flat on Friday. This came amid the U.S. economic data that turned out to be better than forecasts. As a result, a stronger U.S. dollar pushed commodity prices lower.

The current market conditions signal a possible move in either direction. A bullish close after last Friday's doji could signal a move back to the upside. However, gold prices need to breakout from above the 2000 level to confirm the move to the upside.

To the downside, the consistent lower highs could signal a breakdown lower. The descending triangle pattern has formed a support near the 1922.85 level. This puts the minimum downside target toward the 1850 handle.

Are oil prices turning bearish once again?

WTI 0709

WTI Crude oil prices continued its bearish outlook with the declines accelerating on Friday. Prices were down over 4.45% on the day following through after the doji candlestick pattern formed in the previous session. The close also saw the 200-day and 50-day moving averages being breached.

The oversold market conditions in the Stochastics however could signal a possible rebound. The 42.00 level could be tested for resistance once again. This could keep prices to consolidate back near the 42.00 level.

If the bearish momentum continues, then we expect price action to eventually drift towards the 30.00 handle. Establishing support at this level will offer some kind of support as price could then attempt to push higher.

Euro holds steady near the top end of the rally

EURUSD 0709

The euro currency has been bearish for the most part last week. A minor support has formed near the 1.1800 level which has managed to keep price action positioned to the upside. However, the bias remains mixed as the EURUSD heads into an important week.

The European Central Bank will be holding its monetary policy meeting this week. There is speculation that the ECB could expand its stimulus. There are also rumors that the central bank isn't too happy with the euro's current exchange rate. With all of these issues weighing on the common currency, it will be an interesting week.

To the upside, a continuation could see the euro rising above the 1.2000 handle. This will then open the way for further gains. To the downside, if the EURUSD loses the 1.1800 handle, then we could see price action falling to the 1.1600 level of support next.

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