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Gold, Oil and EURUSD Weekly Analysis - Week 47

Gold ends the week on a bearish note

XAUUSD 1611

The precious metal was trading weaker over the past week, giving back almost all the gains made from the week before. It was a volatile week in the markets, with the initial euphoria of the COVID-19 vaccine fading into the week's close. This helped the precious metal to recover some of the losses from earlier in the week.

Price action, as it stands now remains supported above the 1850, which has established itself as a firm support area. By Friday's close, gold prices were inching higher, but the sideways range within 1900 and 1850 remains intact. As a result, we could see this sideways continuation for a while longer.

The breakout from this range will be critical as it would potentially establish the direction in the trend. The bias remains mixed at the moment. A strong close above 1900 could signal a potential move higher. But to the downside, a close below 1850 could open the way for gold price to test the 1750 handle.

Oil prices post a three-day losing streak

WTI 1611

The oil markets were giving back the gains toward the latter parts of the week. The declines come about as various industry bodies continue to weigh in on the impact of the COVID-19 vaccine and the demand outlook. Following the latest release from the EIA that the outlook for oil does not change much, oil prices started to fall.

Yet, despite the declines, the crude oil markets have managed to close the week with some modest gains. But the price level near the 42.00 is proving hard to break, leading to a strong pullback in prices. Oil prices settled the week near the 40.00 handle as a result.

Further declines could see the oil prices testing the 50-day moving average. The momentum also remains weak with the Stochastics oscillator moving out from the overbought levels. This could potentially accelerate the declines in oil prices even more.

EURUSD manages to recover some losses

EURUSD 1611

 

The euro currency closed in the Green on Friday, marking a two-day recovery after the sell off from earlier in the week. Yet, on a weekly basis, the EURUSD closed in the red. Price action is likely to continue slightly higher in the week ahead. but the 1.1900 level will prove to be a challenge.

For the moment, we can see that the 50-day moving average is showing a strong level of support. As long as this dynamic support holds, the EURUSD could be on track to retest the 1.1900 level. But this is unlikely to happen any time soon. The ECB is all set to announce further stimulus measures in December.

This is likely to add some downside pressure in the markets. Therefore, the common currency is quite likely to continue to remain in a sideways range. To the downside, the support level near the 1.1600 level will continue to remain in focus. But for the moment, the bias is to the upside.

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