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Gold, Oil and EURUSD Weekly Analysis - Week 51

Gold prices hold despite positive data

XAUUSD 1612

The precious metal closed the week with positive gains. This comes despite some positive developments on the trade talks. On Friday, it was announced that the United States and China agreed to a trade deal. This includes rolling back some of the old tariffs.

With rising risk appetite, gold prices managed to hold their ground. Prices were seen closing off flat on the week. Gold prices are essentially caught within the range of 1480 and 1460. With this side ways range in play in over the past few weeks, only a breakout will confirm the next direction.

The overall bias remains mixed at the moment. A breakout above 1480 will signal further gains in gold prices. Gold could be rising to the 1500 level where the next main resistance level sits. To the downside, a close below 1460 will see prices slipping to the 1440 level of support.

Oil prices close to testing resistance

WTI 1612

Crude oil prices also gained over the week, taking cues from the broader markets in general. Oil prices attempted to test the resistance level of 60.64 but reversed gains just shy of this price level.

We expect that the current momentum will continue to push oil prices closer to the resistance level with the possibility that prices will trade within the 60.64 and 63.00 levels. To the downside, the bias will shift only on a close below the 58.00 handle.

With the week ahead turning out to be more quiet, oil prices could remain range bound and directionless. The rising minor trend line is expected to act as dynamic support. A breakout from this rising trend line will however likely confirm the shift in the bias. But considering all things and the current improvement in the global sentiment, we expect oil prices to be in an upward bias.

EURUSD gives up gains

EURUSD 1612

The euro currency opened near the highs on Friday but price action was bearish. The gains came after the UK elections saw the Conservative party winning a majority. This reduces the risk of a hard Brexit and also raises hopes that the UK will leave the EU end of January.

The declines in the EURUSD will now see price action testing the support area once again near 1.1129 – 1.1111. If price holds steady near this support level then we expect that the bias will be to the upside. The upper resistance at 1.1200 will become the next target for prices.

Alternately, if the support fails, then the EURUSD will likely enter back into the sideways range it was in, previously. This will keep traders guessing with no direction in sight. But for the moment, we expect that the EURUSD will be trading within the new range of 1.1200 and 1.1130.

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