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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 01/11/19

Gold breaks out higher


The precious metal was seen posting strong gains on Thursday following a modest build up in the momentum from the day before. The gains come as price action is breaking past the triangle consolidation pattern. This indicates that the precious metal could be in for some further upside.

However, question remains as to whether the gains can be sustained. Unless gold prices break past the previous highs, a formation of a lower high will lead to the downside. Gold prices are pending a correction lower. But the current price action indicates otherwise.

Given the fact that price action has been largely consolidating for a while, it is likely that gold will regain this consolidation once again. Price action has already formed a lower high few weeks ago. Therefore, another lower high will increase the bias to the downside. For the moment, it is ideal to remain on the sidelines.

Crude oil drops for four consecutive days

WTI 0111

Oil prices have been in a steady decline, marking a four consecutive session in losses. The declines came following bearish fundamentals. The United States weekly crude oil inventories report saw a build up once again.

For the previous week, inventories gained over 5 million barrels. This comes after last week there was a surprise draw. Overall, commercial stockpiles of crude oil have been rising steadily. Saudi Arabia also said that its oil production had increased leading to the oversupply.

From a technical perspective, the current declines in oil prices comes after price action failed to break past the trend line. The price level of 56.00 is acting as resistance currently. However, the lower support at 52 could act as support. Unless price breaks this range we expect to see some sideways volatility.

Euro trades flat above resistance


The euro currency is showing signs of momentum being exhausted. This comes as prices turned almost flat by Thursday’s close. The gains that were logged saw the EURUSD breaking past the resistance area of 1.1111 – 1.1130. Unless the EURUSD rebounds off this level there is a chance of a decline.

The lower support area of 1.0958 will become the downside target. The euro currency failed to hold on to the gains despite the third quarter GDP report coming out better than expected. The Eurozone economy grew at a pace of 0.2% in the three months ending September. This was higher than the forecasts of a 0.1% increase.

Technically, a retest of 1.0958 will see prices establishing a bottom. However, the momentum to the upside remains weak. The EURUSD currency pair has been trading flat for the most part. As a result, we could see the sideways range being maintained.

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