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Gold, Oil and EURUSD Weekly Analysis - Week 8

Gold retains bullish momentum


The previous metal recovered from the previous week’s declines to turn bullish again as it challenges the previously established highs. The reversal in the bias comes as investors continue to bid up gold prices. At the current state, there is scope for further upside in gold prices.

Currently, price action is still consolidating within the triangle pattern on the daily chart. Thus, a breakout above this triangle pattern will validate the bullish gains. The next main target in gold is seen at the 1640 handle. This will also complete the longer term ascending triangle pattern.

But, at the same time, there is also scope for prices to turn flat again. Keep an eye on the Stochastics oscillator which continues to hint at a bearish divergence. There is scope for gold prices to reverse some of the gains while staying caught within the consolidation.

Crude oil prices looking to reverse direction

WTI 1702

Crude oil prices are turning slightly higher after forming a bottom near the 49.50 handle. The reversal in crude oil comes as prices test the resistance area at 52.00. OPEC members are looking to dismiss a proposed meeting after Russia reported pulled out of talks.

For the moment, the fundamentals in crude oil remain mixed. Earlier last week, a strong build up of inventory failed to stem the upside bias in crude oil. Technically, oil needs to breakout past the 52.00 level. A convincing close above this level could signal a move to the 55.22 region where resistance could form and be tested once again.

To the downside, the bottom looks to be in place. WTI crude oil has already formed a bottom. Thus, any pullback could see prices trading sideways within the 52.00 handle and the 49.50 region.

EURUSD maintains the downtrend


The euro currency continues to remain weak as the downtrend which began in early February continues. Price action could remain this way unless there is a pullback in either the USD strength or the euro is backed up by some bullish fundamentals.

For the moment, while there is scope for further declines, prices are near a multi-year support level. Therefore, there is scope for a rebound to the upside. The price level near 1.0958 could act as an immediate resistance level for the moment. Only a breakout above this level could confirm further upside in prices.

However, this is unlikely to happen anytime soon. We expect some consolidation to take place in the EURUSD markets in the short term. Given the fact that longer term trend is also flat, EURUSD could continue to rattle investors.

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