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Gold, Oil and EURUSD Weekly Analysis - Week 9

Gold steady at a seven-year high

XAUUSD 2402

The precious metal continues its bullish onslaught as price action perches steady near a seven-year high. Into Friday’s close, gold touched intraday highs of 1649.26 before pulling back slightly to close at 1643.42.

The gains come as investors maintain a risk off appetite. Despite equity markets making some modest gains, the interest in gold is rising. We expect prices to push slightly higher toward the 1650 handle. This is where resistance could start forming.

Further gains however will come at a risk of a pullback. Given that no support has been formed at the lower levels, the current bullish trend might become unsustainable. As a result, we continue to watch how gold prices will evolve over time. Watch for signs of a possible reversal near the current levels that could signal the exhaustion to the trend.

WTI Crude oil pulling back

WTI 2402

Crude oil prices closed on a bearish note on Friday. The modest pullback comes after price action posted strong gains earlier in the week. The declines can be attributed to perhaps profit taking into the close of the week.

There looks to be a reversal pattern forming near the current pivot highs of 54.00. Following the doji close earlier on Thursday and the bearish close on Friday. This could indicate a move lower. The support area near 52.00 will be important for prices in the short term.

If oil prices form a support near the 52.00 region, we anticipate the move towards the 55.22 handle quite easily. But there is also a risk of prices losing the 52.00 handle due to consolidation. For the moment, we see that the hidden bearish divergence is in play suggesting the move to the 52.00 region.

EURUSD reversing at 1.0800 handle

EURUSD 2402

The common currency closed on a bullish note near the lows of 1.0800 region. This comes after a prolonged decline since early February. The big question is whether the EURUSD can maintain this momentum after the reversal.

The Stochastics is flat in the oversold level. This suggests that momentum is weak. Thus, any rebound could be met with a strong reversal back to the current lows. In terms of the immediate resistance levels, watch the region near 1.0900.

It is quite possible for resistance to form here. Price action will easily rise to this level with a divergence of some sort. This will keep the common currency within the 1.0900 and 1.0800 region for a while.

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