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Gold, Oil and EURUSD Weekly Analysis - Week 43

Gold prices consolidate into an inside bar

Gold 2110

There is a potential for a big breakout to emerge in the coming week or weeks. Gold prices have remained perched near the highs as the consolidate remains firm. However, for the past few daily sessions, gold has been trading within a smaller range. This has resulted in an inside bar being formed.

The price action indicates that we could see a big breakout from the candlestick pattern as a result. This would indicate a breakout in either direction. The bias remains to the downside as we anticipate the correction to the 1440 handle.

In the event that gold prices move above the 1497 region, then price action will remain stuck within the range of 1522. A close above the previous highs will see new bulls entering the market. This could potentially make way for a new leg to the uptrend.

Crude oil remains flat with a bearish outlook

WTI 2110

WTI Crude oil prices continue to remain trading within the channel of the bearish flag pattern. There hasn’t been much movement on this front. The slowdown in the momentum for crude oil prices is evident. This comes amid a mixed report on the global economy.

On Friday, China’s GDP report showed that the economic activity slowed to a pace of 6.0%. This was the lower bound target range set by China. The escalating trade wars adds to the uncertain outlook. This has in turn kept crude oil prices subdued.

We can therefore expect oil prices to remain subdued. Given the current set up, crude oil prices could edge lower. But a strong downside breakout is required to confirm this move. The lower support level at 50.00 remains critical. This level hasn’t been tested. Therefore, gains are unlikely to hold amid lack of support being formed.

EURUSD breaks past resistance

EURUSD 2110

The currency pair broke past the resistance level to close at a two month high. The strong momentum in the euro comes largely because of a weaker dollar. The USD has been trending lower over the past few days, giving way for the EURUSD to make some strong gains.

With the resistance level being cleared, further upside is expected in the near term. The next main resistance level at 1.1200 – 1.1224 will be tested. Price action could then consolidate within this level for the short term. The breakout above the resistance level also invalidates the potential for an inverse head and shoulders being formed.

With some major events lined up over the week, such as the ECB’s monetary policy meeting, the currency pair will likely retreat slightly from this bullish momentum. Watch the lower support.  A breakdown below this level could potentially confirm a move back to the lower support area of 1.0958.

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