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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 01/04/20

Gold prices consolidating after strong gains from last week

XAUUSD 0104

Price action is taking a pause in XAUUSD after posting strong gains last week. The price action in gold saw a full recovery from the sell off from the week before. However, after hitting the highs of 1620, price action is trending lower.

Price action remains range bound within the 1620 – 1580 handle for the near term. However, the current consolidation is showing a possible breakout from this level. Given the bullish pennant pattern that is forming, there is scope for an upside breakout.

Watch the support level at 1580 in the near term. If this level fails, then we expect a move lower. The lower support of 1522 will come into the picture. Further more, given the lower high that is forming, the bias is rather mixed for gold.

WTI crude oil prices continue its sharp declines

WTI 0104

Oil prices continue to remain weak falling to a 35-year low earlier this week. Price breached below the 20 handle, dipping slightly to the 19.25 handle earlier this week. The declines come as oil prices are reacting to the expected weaker demand from the global economy.

Price action in crude oil is back near the previous lows. There is scope for prices to bounce back off this level in the near term. But the Stochastics remains strongly oversold in the near term. This could signal a possible bottom forming.

If there is a rebound off this level, then we expect a move to the 28.00 handle. But overall, we expect a sideways range to form between these levels. Unless prices breakout above 28.00 we do not expect to see any major gains in the near term.

Euro holds on to 1.1000 support

EURUSD 0104

The euro currency is trading weaker for the second consecutive day. This comes right after prices rallied to highs of 1.1141 level late last week. But given the pullback to these gains, the support level of 1.1000 is holding on.

If this support fails, then we expect a decline lower to the 1.0784 region. A rebound above this level could signal a move higher. A breakout above 1.1141 could see further highs in prices.

A breakdown below 1.1000 could however see further declines. But the range will be maintained within 1.1000 and 1.0784 region. Given the fact that the euro is susceptible to the dollar strength, this could become a possibility.

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