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Gold, Oil and EURUSD Weekly Analysis - Week 38

Gold hints at bearish signals

XAUUSD 1409

The precious metal was trading a bit volatile last week as prices were confined above the 1900 level. This consolidation near the top of the rally could soon trigger a possible breakout. The falling minor trend line remains in play, with a breakout of the trend line likely to push price higher. To the upside, gold prices battle the 2000 level of resistance.

The 1900 level of support is also coming by means of the 50-day moving average. Therefore, a strong catalyst is needed to push prices lower. The Stochastics oscillator on the daily chart is also well positioned in either direction. Therefore, it is quite likely that the Fed will be the main event to watch this week.

While no changes are expected from the central bank, the tone of the Fed will certainly push the markets one way or another. As a result, with a mixed bias, the 2000 - 1900 range is now critical to the direction of the breakout in the precious metal.

Oil prices make modest gains, but overall bias remains weak

WTI 1409

The commodity managed to recover from the losses earlier in the week, as WTI crude oil rose about 0.79% on the day. Still, on a weekly basis, oil prices are down for the second consecutive week. This comes as the commodity managed to break down lower from both the 50-day and the 200-day moving average.

The recent lows formed earlier in the week near 36.10 is holding up for now. However, since the declines, price action in oil is forming an inside bar. This confining price action is sure to trigger a possible breakout soon. With the Stochastics oscillator in the oversold levels, there is some likelihood for prices to move higher.

But any gains are likely to be capped near the 42.00 handle. To the downside, the 35.00 level of support will hold for the moment. But if oil prices lose this handle, then we expect further declines that could push WTI crude oil to test the 30.00 level of support next.

EURUSD gains for three sessions

EURUSD 1409

The euro currency has managed to close on Friday with some gains, marking a three-day winning streak. However, the momentum has certainly slowed, which as a result has kept the EURUSD in a range. Price is yet to challenge the precious highs near the 1.200 handle.

Meanwhile, the 1.1900 level is turning into a strong resistance level for the moment. This means that the EURUSD could possibly be turning lower. However, watch the Stochastics oscillator which is in the oversold area and moving higher. This coincides with the support bounce off the 1.1800 level.

As a result, the best bet is for the EURUSD to maintain a range within 1.1900 and 1.1800. A breakout from these levels will potentially see price action breaking out higher. Above 1.1900 we will see a retest of the 1.2000 handle. To the downside, below 1.1800, we could see the 1.1700 handle being tested next.

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