Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 04/09/20

Gold slips as dollar rebounds


The precious metal is posting losses for the second consecutive day, just after price mounted a strong rally earlier in the week. Following the failed attempt to rise to the $2000 level, the precious metal has been trending lower, having cleared the 1950 handle in the short term.

At the current pace, gold prices could be retesting the 1900 level anytime soon. But considering that this is a strong level of support, we could expect prices to rebound if the support level holds. But this also means that gold prices need to rally to maintain the uptrend.

With the $2000 level now holding up as strong resistance, the bias to the downside is rising. The Stochastics oscillator is currently bearish, and this could see prices turning lower. But with the 1900 level also showing a confluence with the 50-day moving average, we could expect a modest rebound after gold prices touch the 1900 handle.

Oil drops as fears of demand resurface

WTI 0409

WTI Crude oil prices are trading weaker following the previous attempt to breakout from its range. Over the past few months, oil prices have been strongly consolidating near the 40's, reflecting the current economic mood. The declines this week were offset by renewed fears of demand globally.

For the moment, price action looks to be supported by the confluence of both the 50-day and the 200-day moving average. This could be a hard support level to break. However, in the event that oil prices do indeed breakdown below the 40's, we could expect further declines.

The Stochastics oscillator is however hinting at a possible move to the upside. After moving out from the overbought levels, the Stochastics oscillator is moving close to the 20 level. This could potentially signal a turnaround in prices.

Euro slips on stronger USD and ECB


The euro currency gave up the gains, trading lower for three consecutive sessions. This comes right after the euro touched the 1.2000 level, which marked a fresh two-year high for the currency pair. Prices are currently holding on to the dynamic support off the median line.

But we could expect this level to break any time soon. The Stochastics oscillator is currently bearish, and there is further room to fall. From a price perspective, the EURUSD has managed to hold on to the 1.1800 level of support so far. But a break down below this level could accelerate declines further.

If the euro fails to hold on to the 1.1800 handle, then we expect the declines to eventually push the currency pair back to the 1.1600 handle. Given that this level was barely tested, it is quite likely to be the downside target. The bearish sentiment in the EURUSD comes as the ECB will be holding its monetary policy meeting next week.

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