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Gold, Oil and EURUSD Weekly Analysis - Week 38

Gold prices form a bearish reversal pattern

Gold 1609

The precious metal, failing to capitalize on the gains from Thursday closed in the red by end of last week. This marks a bearish reversal pattern near the resistance area of 1497 on the daily chart. Price action also looks to have formed a lower high after briefly rising close to 1522 last week.

But traders need to wait for a breakdown below Wednesday’s low of 1483. A daily close below this level will confirm the downside bias. The support area of 1440 remains the likely downside target for gold. Unless price action bounces off the dynamic support of the rising price channel, we expect a move lower.

In the near term, watch for any potential pullback. This will likely bring in more selling pressure into the precious metal. Overall, the decline toward the 1440 level of support will mark a healthy correction in the longer term uptrend in gold.

Crude oil turns bearish

WTI 1609

Oil prices, having failed to capitalize on the gains earlier in the week turned bearish. WTI Crude oil prices fell for four consecutive daily sessions. However, price action overall remains flat. Oil prices have been trading within the established range of 58 and 52.

A breakout from this range is required for oil to post further direction or to establish a trend. Until this happens, we expect oil prices to remain bouncing off the support and resistance level. The symmetrical triangle pattern which indicates a breakout also failed.

With the FOMC meeting due this week, the US dollar will come under pressure. This could potentially dictate the near term directionality in oil prices. Meanwhile, further down the line, oil investors will likely wait into December when OPEC meets again. Talks about potential cuts to oil production remain a possibility.

EURUSD still remains subdued near lows


Despite the ECB’s meeting last week which sent the common currency briefly higher, the overall price action in the EURUSD remains subdued. The euro managed to close on Friday but only with modest gains.

The price action on Friday indicates that the upside momentum could be easing. The EURUSD remains trading close to a two-year low. The dynamic support/resistance offered from the trend line is currently seeing quite a bit of a consolidation.

Therefore, it is likely that we expect this sideways range to continue. The immediate resistance level of 1.1129 – 1.1111 will be tested in the near term. But it is unlikely to see the EURUSD breaking out above this level. As a result, the EURUSD currency pair might be stuck to the current lows.

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