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Gold, Oil and EURUSD Weekly Analysis - Week 48

Gold resumes the declines – But will it continue?

XAUUSD 2511

The precious metal resumed the declines from the middle of last week, posting losses for three consecutive days. The declines have signed a technical bearish flag pattern as a result. This could result in further downside if the lows at 1462 are breached.

Economic data over the week was sparse. The U.S. and China trade talks were the only catalyst in determining the flows in the markets. Gold prices also closed bearish on the week, reversing the gains from the week before. Given that the week before saw a strong bearish fall, the declines could resume.

In the near term, gold prices will have to test the support area of 1440. A break down below this price level will trigger further declines in the medium term. This will potentially open the way for a fall towards the 1346 handle where the next support resides.

Crude oil prices resume the uptrend

WTI 2511

Oil prices were bullish over the week but quite volatile. However, this marks three consecutive weekly gains in the commodity so far. Overall, price action in crude oil remains very volatile and there is scope for price to slip lower as well, despite the bullish outlook.

From a technical perspective, crude oil prices could be looking to post some further modest gains. The resistance area of 60.64 will be tested in the near term, if the current momentum can hold. But Friday’s bearish close could see a modest retracement in the near term.

Overall, oil prices are flat trading within the 60.64 resistance and 52.00 level of support. Given that prices rebounded off the major falling trend line, we expect the upside to prevail in the near term. This will see a possible test of 60.64 where we expect prices to reverse the direction.

EURUSD slips once again

EURUSD 2511

The common currency was seen erasing the gains made over the week with a strong decline on Friday. The euro was down over 0.41% on the day as a result. The declines come as the EURUSD maintains the bearish trend for the moment.

If the declines continue, we expect further losses to eventually test the lower support region near 1.0958. With price action trading within 1.1111 and 1.0958 there is no respite for the sideways price action in the near to medium term outlook.

Things could change if the euro slips below the support level of 1.0958. A close below this support will trigger declines that could possibly send the euro to fresh lows. However, as long as the support holds, price action could remain trading flat.

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