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Gold, Oil and EURUSD Weekly Analysis - Week 49

Gold slips past the 200-day moving average


The precious metal renewed its downside bias on Friday as price broke past the 200-day moving average. However, the declines were marked by holiday thin trading and therefore, we could expect to see a retracement in the near term. But at the same time, if gold prices continue lower, we could see the longer term correction taking shape.

The next key target to the downside in gold comes at the 1750 level of support. If price action falls to this level, we could expect to see another major milestone reached in this correction. There is also a strong chance that gold prices will hold at this level of support.

To the upside, if prices retrace from Friday's close, then price action is likely to consolidate. This consolidation could happen with the 1850 level coming back into focus. Given that this level has not yet been tested for resistance, it raises the odds quite a bit.

Crude oil settles near an eight-month high

WTI 3011

The commodity continued to push higher on Friday, retracing the losses from the day before. Oil prices settled near $45.70 a barrel for the first time since March this year. The current pace of gains comes ahead of the OPEC meetings due this week.

We expect the consolidation to continue in the medium term. The declines are likely as oil prices will be falling back to test the 42.00 level of support. Establishing support at this level is critical in order for further gains to solidify to the upside.

In the unlikely event that oil prices lose the 42.00 level of support, then a sharper correction is on the cards. This would open the way for oil prices to retest the 36.15 level of support once again. It would also weaken the upside bias for the moment.

EURUSD resumes the upside


The euro currency closed on Friday with modest gains, rising 0.42% on the day. This comes following a doji close the day before. Price action is back above the 1.1900 level once again. This could mean that further gains could come for the common currency.

To the downside, the support area at 1.1900 will now likely hold the common currency from further declines. But a close below this level could signal a move down to the 1.1800 level. This would put the EURUSD back into a sideways range within the said levels.

To the upside, the 1.2000 level will now be a key challenge. The euro currency retreated after briefly testing this level in early September this year. But if support near 1.1900 is formed, then the EURUSD could easily break past this key psychological resistance level once again.

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