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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 01/03/19

Gold prices break 1320 - Bearish momentum?

Gold 0103

Gold prices eventually capitulated after failing to maintain any significant gains after holding out above the 1320 handle for a few sessions. The declines in gold prices came as the bullish Ichimoku cloud was breached followed by a quick retest of the same.

This suggests that the upside is limited for the moment and the declines could continue. However, given that the 1320 level has been breached, we can expect to see any retracements attempting to testing this level in the near term. The next main support is seen at the 1300 level which could stall the declines for a while.

A move to 1300 could potentially keep gold prices to trade within the range of 1320 and 1300. Still, a retracement to 1320 remains a good level to sell the rallies targeting 1300 initially followed by a move to the 1280 handle.

Crude oil rebounds, but a top could be forming

WTI 0103

Oil prices reversed the declines from earlier this week as prices retraced the losses completely. Following the decline to 55.0 level, WTI crude oil rallied back and is seen currently testing the 57.0 level. There is a possibility that resistance could be formed here.

The 4-hour Stochastics oscillator is currently seen singling a bullish signal, but there is also a divergence seen on the charts. In the near term, price action remains balanced with the potential for oil prices to breakout higher or to decline. Watch for the Ichimoku cloud which remains a strong level of support for the moment.

Regardless prices will need to break past the previously established lows near 54.85 levels in order to confirm the downside which would most likely stall at 54.00 anyway.

EURUSD remains choppy


Price action in the EURUSD did not make much headway as prices are seen retreating off the highs just below 1.1420. The declines could potentially push the common currency lower. However, we suspect that the current declines in EURUSD is limited, largely due to the month end flows and portfolio rebalancing among money managers.

Technical support in the EURUSD is seen at 1.1360 level which is likely to hold the declines at the moment. A break down below this level could trigger a move to 1.1312 level which will see the EURUSD erasing the gains completely and retesting the previously established support level.

Overall, the currency pair could maintain its choppy price action heading into next week’s ECB meeting.

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