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Gold closes bearish for the week

Gold 1410

The precious metal closed bearish on the week and in the process marking a bearish engulfing pattern on the weekly charts. The declines come following the failure to breakout higher. Gold prices remained trading flat after forming a lower high. The weekly candlestick pattern confirms that the downside will resume.

By Friday’s close, gold closed outside of the range, falling below the 1497 handle. As long as the upside is limited at or below this level, we expect to see further declines. The support level at 1440 remains key in the near term. This is the most likely downside target.

The declines to 1440 will mark a correction to the longer term uptrend in gold prices. But in case that prices extend below this level, we could see a sharper correction. Gold prices remain influenced by the major global narratives. For the moment, the positive trade news headlines remain the key factor.

Crude oil prices rise as fundamentals turn bullish

WTI 1410

Oil prices gained last week on the fact that an Iranian oil tanker was attacked. News reports said that the attacks seem to have come off the Saudi coast. The reports raised prospects of fresh unrest in the Middle east region.

Fundamentally, oil prices remain bearish. This comes after weeks of build up in crude oil inventory. Following the lower breakout from the rising wedge pattern, crude oil failed to decline lower to test the 50.00 handle. This potentially marks a short term retracement.

The current gains could see oil prices rallying to test the breakout level around the 55 region. Retesting this level to establish minor resistance could see further declines in the near term. However, if oil prices break past the 55 level then further gains cannot be ruled out.

EURUSD on track to maintain the upside

EURUSD 1410

The EURUSD currency pair managed to maintain a healthy rally in the short term. The gains are confirmed after the EURUSD closed above the price level of 1.0958 level. This was also after this price level was briefly tested for support.

The gains could however see some retracement in the near term. Currently, the daily stochastics oscillator is seen pointing to a hidden bearish divergence. As a result, this could see some near term correction taking place. The price level of 1.0958 will be important.

If the EURUSD closes back below this level then we anticipate the sideways range will continue once again. To the upside, the EURUSD will be looking to test the main resistance level of 1.1111 – 1.1129 region.

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