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Gold, Oil and EURUSD Weekly Analysis - Week 49

Gold posts modest gains for the week

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The precious metal rose slightly on the week to close in the green. But the pace of gains was limited in nature. However, price still recovered some of the declines from the week before. Overall, price action remains flat on a weekly basis with prices since the past three weeks consolidating near the1460 handle.

On a daily time frame, gold prices closed with gains on Friday, marking a modest two-day gain. With the chances of a bottom being established, we expect gold prices to resume a modest rally from here on. Gold prices have to break past the 1470 handle which marks a pivot high.

A close above 1470 will signal continued gains to the upside. The next main resistance is seen at 1497. It is possible that prices will rally to this level to establish resistance. The medium term bias remains to the downside, with the initial support at 1440 likely to be tested over the next few weeks.

Crude oil prices fall over 5% on Friday

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Oil prices fell sharply on Friday, losing over 5% on the day. This comes as oil prices have been attempting to post modest gains higher. Following the test of the 58.00 handle, oil prices gave up the gains over the past few days.

By Friday’s close, oil settled near 55.22. While oil has broken the minor rising trend line, price action is supported by the major falling trend line. This will offer some dynamic support in the near term. Therefore, we could expect to see some rebound in prices.

In the event that oil prices break down further, we could expect price action to continue to drift lower. The next support is seen at the 52.00 handle which was tested previously. There is scope for further declines if oil prices fall below the 52.00 handle. However, we do not expect to see that happening for the moment.

EURUSD turns flat at the lows

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The Euro currency is in the process of chalking out a short term bottom near 1.1000 handle. Price action has turned flat at this level. Failure to break past this level has kept the bullish bias intact for the short term.

We expect the gains to potentially see the EURUSD now attempting to rise back to the 1.1111 level. Establishing resistance here will see the currency pair keeping within the sideways range it has been trading.

Alternately, if the 1.1000 psychological support breaks, then we could expect to see further declines down to the main support level at 1.0958. As long as these two support levels hold up, the euro currency could keep its losses to a minimum.

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