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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 04/01/19

Gold rises to a seven month high

Gold 040119

Gold prices continue to maintain the bullish momentum as price action is seen testing just below the 1300 handle. This also marks a fresh 7-month high in gold prics. The gains came as gold manage to post a quick reversal off the 1280 level of support.

However, the retest is not firm and could risk gold prices pushing lower to retest the 1280 handle as a result. Further down, the pending retest of the 1250 handle could also keep price action under check. In the near term, gold prices could most likely test the 1300 round number resistance given the current momentum.

A break down below the 1280 region is needed to confirm the downside correction in prices. With the Ichimoku cloud also showing the strong bullish momentum, we expect gold to consolidate near 1280 in the near term before pushing lower.

WTI Crude oil prices form a rising wedge pattern

WTI 040119

Crude oil prices managed to recover past the 46.00 level which was initialy set by a brief rebound off the lows near 42.50. While price action managed to clear this level, we could expect a near term retest of the 46.00 handle.

Crude oil prices have formed a bearish rising wedge pattern near the lows. This could potentially indicate a continuation of the bearish trend. A break down below the 46.00 level and a breakout from the rising wedge pattern could confirm this price action movement.

In the near term however, it is clear that crude oil prices are in the process of forming a bottom at the current levels. To the upside, the resistance level at 50.00 remains a strong level that is unlikely to be breached in the first test. However, it is clear that crude oil prices could be seen maintaining a new range within the 50.00 and 42.50 level in the medium term. This indicates that the bearish trend is likely to pause for a considerable period of time.

EURUSD continues is ranging price action

EURUSD 040119

The EURUSD was seen initially dropping to lows below 1.1320 only to reverse the losses and retrace most of the declines. However, price action is seen stalling near the Ichimoku cloud and signals resistance. A continuation to the downside could be needed for the EURUSD to retest the 1.1280 level of support more firmly. In the eventual breakout to the upside, then the common currency will need to retest the 1.1450 level of resistance in order for any hopes of maintaining the bullish trend.

As a result, we expect the common currency to continue with its sideways price action over the coming few days. However, watch for a potential breakout that could occur given the amount of time the EURUSD has been trading flat.

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