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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 03/07/19

Gold attempts to recover losses

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Gold prices were seen pushing higher on Tuesday with price rising over 1.39% on the day, at the time of writing. The gains came following Monday’s steep declines. The losses in gold prices came due to the markets cheering the news about the U.S. and China calling a truce on the trade wars.

From a technical perspective, the reversal off Monday’s close at 1384 has created a temporary support. The rebound off this level will however pave the way for further direction in the precious metal. Unless gold extends the gains higher and posts higher highs, we expect this rebound to remain flat.

The bias remains flat at the moment but could turn to the downside if gold prices fail to rise above last week’s highs near 1420. To the downside, the breach of the minor support at 1384 will open the way for gold to dip to 1360 followed by a move to 1320 eventually.

Crude oil tests 57.50 support

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Oil prices fell sharply on Tuesday, losing over 3% on the day. This pushed oil prices down to test the 57.5 handle where support was to be formed. The declines came after OPEC announced that it would continue with its production cuts already in place.

If crude oil loses the 57.50 handle, we expect the declines to continue further. Oil prices will likely be testing the 50.00 handle in the medium term. However, if oil manages to consolidate near the 57.50 support, then we expect to see some upside price action.

The $60.00 handle remains key for the short term, but further gains could be expected towards the $63.00 handle.

Euro stays weak below 1.1400

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The common currency posted strong gains at the start of the week. This came mostly on account of a stronger U.S. dollar. With the 1.1400 level losing ground, the EURUSD has been drifting lower. Economic data from the U.S. has been somewhat better than expected, keeping the USD on the front foot.

The current reversal in the EURUSD currency pair coincides with the 1.1300 level. This round number support is likely to hold up in the near term, but the gains could be limited. We expect the currency pair to remain flat in the short term, trading within the 1.1400 and 1.1300 levels.

From the medium term perspective, if the EURUSD manages to extend gains higher then it could confirm the current higher low being formed in price. Still, the euro currency will need to clear the 1.1400 handle to confirm this upside bias.

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