Gold, Oil and EURUSD Weekly Analysis - Week 44

Gold ends week with muted gains


The precious metal gave back much of the intra-week gains into Friday's close. The muted close comes ahead of a key week that includes central bank meetings from the Bank of Japan, Bank of Canada and the European Central bank. There is a very good chance that further stimulus measures from any of these central banks could push gold prices higher.

The precious metal has settled above the 1900 level for the moment. However, there is still a large risk of price action moving lower. For now, the daily charts show a sideways movement in prices. This could potentially lead to a breakout in the near term. A number of big-ticket events over the next few weeks could see prices establishing a trend.

As a result, for the moment, gold prices remain flat with the bias also flat. If price action loses the 1900 level, then we expect further declines to come. This will accelerate the declines down to the 1850 level next.

Oil prices close flat for the second consecutive week

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Crude oil prices close flat for the second week amid lack of direction and fundamentals. This comes despite Russia announcing its support toward extending the OPEC+ output cuts. However, oil prices have been broadly flat over the week as the weekly build up in inventory put downward pressure on the prices.

Oil prices continue to trade in the strong sideways range which is showing no signs of letting go. Only a strong fundamentally driven move will be able to nudge oil markets out of their current range. As a result, the 42.00 level of resistance and the 36.00 level of support remain in play.

In the very short term, the daily Stochastics oscillator is pointing lower. This could suggest another pullback off the current highs. But despite this, price action is unlikely to head anywhere beyond the support established at 36.00 handle.

Euro steady ahead of ECB meeting


The euro currency has closed the week, comfortably above the 1.1800 level. The gains come ahead of a crucial week for the euro. The European central bank will be holding its monetary policy meeting this week. Investors will be eager to see if the ECB will announce any additional stimulus plans during the meeting this week.

For the moment, the bias remains to the upside. In the event that the ECB does not signal any further action, the euro has scope to jump to the 1.2000 handle next. This will mark a retest of this resistance level last seen on September 1st. But a breakout above this level is required for further gains.

To the downside, if the 1.1800 support gives way, then the EURUSD might head lower. This will potentially open the way for a decline to the 1.1600 support that hasn't been tested just as yet. Watch the Stochastics oscillator which is currently moving out from the oversold levels.

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