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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 04/12/19

Gold rises once again, recovering from earlier losses

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The precious metal is seen posting steady gains on Tuesday, recovering the losses from earlier in the week. The gains in the yellow metal comes amid renewed uncertainty set off by President Trump on Tuesday.

Trump said that he would rather wait until the 2020 elections for the U.S. and China trade deal to progress. This set off a correction in the markets as risk sentiment fell, leading to a rise in safe haven assets such as gold. Gold prices are up over 1% on the day on Tuesday. The current gains could see price reaching towards the 1497 mark if the current 1479 region can be cleared.

Overall, gold prices would remain range bound as they have been so far. Gold is trading within the range of 1460 and 1540 over the past few months. Unless there is a breakout from this wide range, price action could remain caught sideways.

Oil prices trade flat for a second day

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Crude oil prices are on track to close flat for a second consecutive day. This comes after oil prices fell sharply late last week. The current price action comes as oil traders weigh the prospects of the OPEC meeting as well the current state of the trade deal.

The doji patterns indicate indecision ahead of the OPEC meeting. Rumors are rife that OPEC is considering prolonging the current production cuts into March 2020. This is done in order to bid oil prices higher. However, lack of demand could also dampen the demand for crude oil.

Currently, the price action remains mixed although the bias is to the downside following last Friday’s declines. The lower support is at 52.00 while to the upside, price action needs to breakout above the 58.00 handle in order to test the resistance area of 60.50.

EURUSD rally could stall at resistance

EURUSD 0412

The euro currency has been posting steady gains for the second consecutive day. This comes amid a broad weakness in the US dollar. The dollar has been weaker after weak patch of economic data has hit the sentiment in the currency.

The euro’s gains are only short term as the overall trend remains flat. If the current momentum continues, then the EURUSD will be testing the 1.1111 level of resistance. This will keep the currency pair range bound within 1.1111 and 1.10958. Only a strong breakout from this range will clear the way for further gains or declines.

Above the resistance level of 1.1111, we expect the euro to aim for 1.1200. For the moment, the downside risks are diminishing. Support is clearly seen at the psychological price point of 1.1000 region. Unless this level is breached, we do not expect further declines in the EURUSD.

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