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Gold, Oil and EURUSD Weekly Analysis - Week 52

Gold settles within 1900 and 1850 range


The precious metal was seen trading rather subdued on Friday. However, this comes after three consecutive daily gains. Gold prices managed to close above the 50 day moving average and as a result, price action is now trading within the sideways range of 1900 and 1850. Given that both these levels have proven to be strong resistance and support levels, we could expect sideways continuation within these levels.

Only a strong breakout from either of these levels will confirm further continuation either to the upside or to the downside. Above the 1900 level gold prices will then set eyes on the key 2000 level. To the downside, a breakdown below 1850 could still see only a modest correction taking place. This comes as the 200 day moving average is likely to hold on as strong support.

The stochastics oscillator is signaling a possible move from the overbought levels. As a result, we could see a short term correction taking place. Still, gold prices are likely to continue maintaining their hold above the 1800 level into the end of the year.

WTI crude oil maintains its bullish streak

WTI 2112

Oil prices continue to maintain a bullish winning streak with price action rising to the highest levels since February this year. On a weekly basis, WTI crude oil has now posted seven consecutive weekly gains. This marks a remarkable turnaround in oil prices which fell below negative just earlier in the year. The gains are driven primarily by the bullish outlook from investors as they pin their hopes that a global economic recovery will Stoke demand for crude oil in the coming months.

The 50 day and 200 day moving average has also made a Golden cross, indicating that the markets are now in bullish territory. The stochastics oscillator is also comfortably settled above the overbought levels showing room for further upside. Oil prices settled on Friday near 49.03. Disports the commodity within reach of the key psychological barrier of $50 a barrel.

The recent gains have not seen any major pullbacks. Therefore, as a result we could see short term correction taking place. In the longer term, the key support level near 42.00 is likely to hold given its confluence with the 200 day and the 50 day moving average. As a result, we could see oil prices pulling back closer to the 45.00 level in the short term.

EURUSD holds steady above 1.2200


The euro currency managed to close on Friday near 1.2252. This marks a new two and half year high in the currency pair. The gains come mostly due to a weaker US dollar. The greenback has been on a decline amid hopes of further government stimulus. The declines in the greenback also suggest a modest risk on sentiment in the markets. This has helped to push the common currency higher as a result.

The current pace of gains is likely to continue unless we see a strong shift in the train. This would mean that if the euro USD closes below the 1.2050 level, then we could expect to see a possible correction down to the 1.2000 level. Further continuation to the downside will see the 50 day moving average coming in as dynamic support. Therefore, we could expect that the euro USD will continue to push on higher.

The main fundamental themes impacting the euro currency for the moment include the ongoing Brexit talks. With the December 31st deadline approaching, the euro currency could be at risk of knee jerk reaction. Furthermore, given that the holiday season is upon us, erratic trading and low volumes could potentially see the euro moving in either direction.

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