Gold, Oil and EURUSD Weekly Analysis - Week 50

Gold prices fall on solid jobs report


The precious metal fell sharply on Friday, losing over one percent over the day. The declines came after the U.S. payrolls report showed a better than expected data for November. This now puts away any doubts of a Fed rate cut in December as a result of the data.

The risk appetite increased, pushing gold prices lower as a result. XAUUSD settled on Friday at 1459. We expect that the declines will continue to push prices even lower. The main support level at 1440 remains within sight in the near term. With a minor resistance established at 1480 handle, the momentum is to the downside.

Watch for price action to test the 1440 level of support. From here, there is a possibility that gold prices will rebound. But the gains could be limited to the 1460 region, which will act as resistance. A breakdown below the 1440 support is needed for gold to continue its descent to the 1420 handle eventually.

Oil prices hit a three month high

WTI 0912

Crude oil prices rose to a three month high, settling on Friday at $59.08. The gains were slightly muted by Friday’s close, but price action was already in the rally ahead of the weekend. The gains came after OPEC, following the semi-annual meeting announced deeper production cuts.

With the markets already expecting this, oil prices posted steady gains in the run up to the Friday’s close. The upside breakout is confirmed after oil broke past the 58.00 level of resistance. From here on, we expect price action to continue its ascent. The next main resistance is at the 60.50 level.

To the downside, if oil prices fall below the support area of 58.00, we anticipate that prices will remain flat once again. The overall trend remains flat for the moment. Oil prices are expected to trade within the 60.50 and 52.00 region in the near term.

EURUSD reverses at resistance


The EURUSD currency pair maintained a strong rally, but price action reversed near the resistance area of 1.1111 – 1.1129 level. By Friday’s close, the euro was down about 0.40%, but price action declines were largely muted. The dollar strength also helped in keeping the euro’s gains in check.

From here on, we expect the euro to either retest the resistance level of continue lower. The downside support at 1.1000 will be critical. As long as this support holds, the EURUSD could remain trading flat. But in the event that there is a breakdown lower, we anticipate further declines.

The next target to the downside is at the support region of 1.0958. Given the fact that this level was not tested firmly earlier, the declines could very well push prices down to this level eventually. The overall trend in the EURUSD remains flat with the currency pair trading between 1.1129 and 1.1000 for the moment.

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