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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 04/10/19

Gold gains on the back of economic uncertainty

Gold 0410

The precious metal has maintained consistent gains, rising for three consecutive days. Price action is seen trading within the 1522 and 1497 region on Thursday. Despite the gains, gold needs to clear the 1522 level in order to confirm the upside. Note that prior to last week's declines, gold posted a lower high indicating the downside bias building up.

Today's payrolls data will be an important market event. A better than expected print could take the wind out of the sails for gold prices. This could confirm the overall downside bias in the precious metal. However, price will need to clear the lower support at 1497 to confirm this view.

Alternately, if the payrolls report also indicates a weak data, this will confirm the recession risks or at best a slowdown. The prevailing risk sentiment could fall giving an added impetus to gold prices. For the moment, it is best to wait on the sidelines until we see further catalyst for gold prices. The overall bias is still to the downside for the moment.

Crude oil slips to a two-month low

WTI 0410

Oil prices continued their descent as the fundamentals turn bearish for the commodity. The declines remain in line with our view that oil prices could slip to the 50.00 psychological support.

The declines were accelerated by the weekly crude oil inventory report. The U.S. Energy Information Administration (EIA) reported that oil inventories rose 3.1 million barrels per day in the week ending Septemebr 27. This was much higher than expected. The gains in the inventory report comes despite Saudi Arabia's oil production being hit.

Furthermore, the uncertainty in the global markets is hinting to reduced demand. The World Trade Organization (WTO) said this week that global economy could slow in 2019 and 2020. This dampened the outlook for oil prices. The commodity is expected to continue falling further. We expect to see a firm retest of the 50.00 level before anticipating any change in trends.

EURUSD upside builds on sustained bullish momentum


The EURUSD currency pair is seen attempting to rebound, marking three days of gains so far. The rebound comes after the currency pair fell to a two-year low. However, it is still unlikely that the current momentum will be sustained for long. The payrolls report due today could be a market mover. A better than expected print could see the dollar rising back, paring losses.

In the near term, with the 1.0958 level being cleared, we expect the upside could continue. A short retest of this level to establish support will further the case for the upside gains. The next main resistance is seen at 1.111 -1.1129. If the bullish momentum prevails, the EURUSD could easily reach this target. But beyond this level, it is unlikely to expect further gains.

This will potentially put the EURUSD back to range trading within the said levels. To the downside, in case the 1.0958 support gives way, the EURUSD could still find support at the recent lows of 1.0900. As long as this low is not breached, we expect the currency pair to move sideways.

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