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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 03/01/20

Gold prices testing upper resistance

XAUUSD 0301

The precious metal continues its bullish streak with price action rising for the third consecutive day. The gains came following a flat close earlier. Gold prices have been rising alongside a rally in the equity markets.

With XAUUSD currently near the 1522 resistance level, there is scope for a breakout to the upside. If prices breakout above this level, we expect the gains to continue to the 1556 level. This would mark a new high in gold prices.

But there is also a risk of prices retreating lower. This depends for price to breakout from the range. The downside risk is that prices could fall to the 1480 level where minor support could turn into a major support if prices hold strong.

Crude oil prices retreat from a four-month high

WTI 0301

WTI Crude oil prices were retreating on the first trading day of the month. The declines come amid uncertainty over the demand for the commodity. However, the China trade is likely to see the appetite rising over the coming months.

Crude oil prices are currently holding off near the support level of 60.64. If this support breaks, we anticipate a steeper retracement. The lower support at 58.00 will be crucial to stem the declines. The minor rising trend line will also come under pressure and could act as dynamic support.

Overall prices will likely remain lower if the support area is not breached. In this instance, prices could remain trading flat within the said levels.

Euro retreats sharply erasing gains from past week

EURUSD 0301

The euro currency was giving up the gains on the first trading day of the year. This comes after prices failed to breakout above the resistance area of 1.1224 – 1.1200. Price action could likely trade flat within the upper resistance and the current support at 1.1129 – 1.1111 region.

The declines in the price comes amid a broader strength in the U.S. dollar. The dollar was seen rising on the back of positive data from China. President Trump is expected to sign a trade deal with China on January 15th. There are also hopes of talks to continue further into the second phase of the deal.

Despite the current declines, the EURUSD will remain within the said levels for the moment. But in the event if the support fails, we could expect prices to potentially retest the 1.0958 level.

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