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Gold, Oil and EURUSD Weekly Analysis - Week 50

Gold prices close with a spinning top


The gains posted by the precious metal over the week culminated with weekly gains. However, the precious metal closed with a spinning top pattern on Friday, after three days of gains. This candlestick pattern could potentially signal a downside move in the markets in the near term.

With the reversal pattern emerging just below the 1850 handle, we could expect to see price action moving lower. The downside support is seen near the 1750 level next. This could also potentially signal the continuation to the downside.

To the upside, price action will need to close with strong gains above the 1850 handle. In this scenario, gold prices will invalidate the downside bias. In turn, this could set up gold to target the 1900 level next. This is a familiar level that has proven hard to break both as support and resistance.

Oil prices rise to a new 8-month high

WTI 0712

Oil prices closed the week with gains, settling at an eight-week high. The gains come ater the OPEC+ decided last week to raise production by 500,000 barrels starting from January. Despite the increase, the oil producing nations pledged to maintain the current curbs on supply in a bid to boost oil prices.

The commodity has managed to settle above the 42.00 level and we also see that the 50-day moving average crossed above the 200-day moving average last week. This marks the first golden cross in oil since the death cross or the bearish moving average crossover that emerged in late January this year.

With prices now above the key price of 42.00, we could expect to see further gains. The next key level of interest will be the 55.00 level. However, for prices to continue rising, we could see support being formed near the 42.00 level.

EURUSD settles comfortably above 1.2100


The euro currency maintained a strong bullish momentum over the week as price action broke past the 1.2100 level. However, on Friday, the common currency closed with modest losses. Still, the upside bias cannot be ruled out for the moment as there is scope for price to continue pushing higher.

If there is a bearish follow through on Monday, then we could expect to see a retracement happening. This could send the EURUSD down to the 1.2000 level of support initially. If this support fails,the next key level of interest will be the support level near 1.1900.

Given that the ECB will be holding its meeting this Thursday, we could expect the EURUSD to consolidate near the current levels. Depending on the outcome of the meeting, the EURUSD is likely to react to the monetary policy statement. As a result, this keeps the bias mixed in the EURUSD for the moment.

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