Gold, Oil and EURUSD Weekly Analysis - Week 48

Gold tracks losses for second consecutive week


The precious metal continued to trade weaker, albeit with the momentum slowing. The precious metal closed with losses for the second consecutive week as investor optimism was boosted by the Coronavirus vaccine. Price action is however trading near above the 1850 technical support which is proving hard to break.

As a result, the sideways range between 1850 and 1900 remains intact with the sideways range not letting go. However, with price action trading below the 50-day moving average, the upside gains look to be capped with a confluence of the moving average and the horizontal resistance level.

On the daily chart, the Stochastics oscillator is oversold, suggesting that there could be a bounce to the upside. Price will need to breakout above the 1900 level strongly to confirm the upside. But the current bias remains mixed leaving price action to continue its sideways range.

Crude oil prices post a three-week gain

WTI 2311

Oil prices closed the week with gains, marking a three-week consecutive gain made in the commodity. Prices rose in anticipation that the Coronavirus vaccine will help get the global economy back on track. However, the pace of gains continues to remain limited with the 42.00 level of resistance back in sight.

While oil prices closed on Friday at 42.42, further gains can only be confirmed on a strong close above this resistance level. This would mean that price action will need to post a strong close above this key resistance level. Failure to do so may result in prices pulling lower.

This could keep oil prices within the range it has been since June this year. To the downside, the support level near 36.15 remains firmly as the downside range. We expect price action to rebound off this level if oil prices slip further.

EURUSD remains locked in a sideways range


The euro currency made some modest gains over the week, but overall price action remains flat near the current highs. Price action has proved hard to breakout above the 1.1900 level. On Friday, the euro currency made attempts once again to inch closer to this level.

The Stochastics oscillator on the daily chart remains overbought. This could suggest that the EURUSD could once again give back the gains. This means that the common currency will likely continue its sideways pattern between 1.1900 and 1.1800 levels in the near term.

Only a strong breakout from this range will signal further gains or losses in the days to come. The bias also remains mixed making it difficult to forecast the next move in the EURUSD currency pair.

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