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Gold, Oil and EURUSD Weekly Analysis - Week 44

Gold attempts to breakout higher


The precious metal closed on Friday with some modest gains. Although prices turned flat, during the intraday session, gold almost broke out from the symmetrical triangle pattern. But price reversed the gains within the session falling shy of testing the short term resistance level of 1522.78.

In the near term, it will be interesting to watch how price action unfolds for gold. The upside resistance at 1522.78 needs to be breached. This will then confirm further upside. Within the symmetrical triangle, there is also an ascending triangle that is forming.

This increases the upside bias in Gold. To the downside, the support area at 1440 remains the main target. The longer term trend’s correction should potentially signal a move lower. But considering the fundamentals, it is unlikely to see this happening. It is best to remain on the sidelines for the moment to watch for further clues.

Crude oil prices inch higher

WTI 2810

Oil prices are in a recovery phase going by the price action. By Friday’s close, oil prices turned bullish. But prices stalled a few points above the previous highs formed four weeks ago. The gains also now invalidate the bearish flag pattern.

Friday’s close comes close to the major falling trend line. At the same time we also see that there is a strong hidden bearish divergence forming on the daily chart. What this means is that price action could be pushing lower. A correction could be on the horizon.

But a lot will depend on where this correction will end. There is scope that oil price could be chalking out a bottom. Watch the support area near 54.00. Establishing support here could potentially trigger a long term shift to the upside.

EURUSD slips below support


The common currency quickly gave up the gains by Friday’s close. As a result, the EURUSD closed back below the support level of 1.1129 – 1.1111 region. This now opens the way for a move to the downside. The declines came as the U.S. dollar regained its strength.

The lower support area at 1.0958 will be key. As long as the EURUSD does not break down below this level, we expect to see the uptrend remain, albeit somewhat weaker. The recent price action also keeps the potential for a breakout higher.

But for this to happen, EURUSD must need to close above 1.1200 handle. Price action in the EURUSD has been very subdued for the most part this year. Therefore, there is scope that prices could remain flat into the end of the year.

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