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Gold, Oil and EURUSD Weekly Analysis - Week 46

Gold rises to a two-month high

XAUUSD 0911

The precious metal settled on Friday with some modest gains. Although closing higher for the week, gold prices made most of the gains on Thursday. The gains came as the U.S. dollar began to weaken amid Joe Biden being the next President of the United States. The gains in the precious metal push it back to the 1950 handle.

At the current pace, XAUUSD might be looking to continue higher. A continuation above the 1950 level could trigger gains to the next key resistance level near 2000. But further gains above this level cannot be ruled out. In case of any pullback in the near term, we could see the 1900 level acting as support.

Price is likely to consolidate within these levels in the near term. The Stochastics oscillator looks a bit oversold and this could point to a short term correction in prices. But as we pointed out, the 1900 level should be strong enough to stall prices from falling further.

WTI Crude oil falls for two consecutive days

WTI 0911

Oil prices are starting to give back the gains following a bearish close on both Thursday and Friday last week. The declines come amid a lot of narratives. Democratic Presidential candidate Biden has vowed to move the U.S. from relying too much on fossil fuels. And with the polls showing Biden in the lead, oil prices are likely adjusting to the new narrative.

Along with this, the ongoing pandemic has shaved off quite a bit of demand which is also adding to the downside pressure. We do not expect to see any big moves in the oil markets in the near term. The sideways range is stuck near the 42.00 handle. Unless this resistance is breached, there is no letting up of the range.

To the downside, the lower end of the range at 36.15 is likely to be challenged. The Stochastics oscillator is looking weaker and this could signal a move back to the lower support area. A retest of the 36.15 level is required in order to establish support and also the sideways range.

EURUSD recovers losses from the previous week

EURUSD 0911

The common currency close last week with solid gains which erased most of the losses from the week before. As a result, prices are now back near the recent swing highs of 1.1872. The gains come largely as the U.S. dollar index has fallen to a two-month low.

To the upside, the 1.1900 level will be the next big challenge for prices. A close above this level is needed to confirm the upside. This will see the 1.2000 round number resistance level being challenged once again. But we do not expect this level break any time soon.

As a result, the EURUSD could settled into a range between the 1.1900 and the 1.1800 levels. The support level is somewhat strong, and even in case of a decline, the lower support area near the 1.1600 handle is too strong for the moment.

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