Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 04/12/20

Gold prices steady after modest correction

The precious metal was bullish earlier this week. The gains came on the back of the U.S. dollar weakening on stimulus prospects. The fundamentals also coincided with the bullish divergence in prices after the precious metal initially fell to 1800.

For the moment, while price action is flat, we could see further gains in the near term. This will push gold prices closer to test the 1850 handle. As long as resistance is formed here, we could expect to see a reversal with the declines resuming.

However, if gold prices break past the 1850 handle, then that would shift the bias to the upside. This will then open the way for gold prices to test the 1900 level once again.

Oil prices muted to OPEC+ output increase

WTI Crude oil prices are trading flat near the 45.00 level of resistance. This consolidation comes even as OPEC+ which includes Russia alongside other OPEC nations agreed to increase oil production by another 500,000 barrels starting January.

For the moment, the consolidation could mean that oil prices could be looking at a correction. Failure to rise above the 45.00 handle firmly could signal a move down to the lower support levels at 42.00.

This is of course, unless oil prices can rise higher to post fresh highs. To the upside, the next key level of interest will be the 50.00 level. Given the psychological importance of this level, oil prices could be looking to maintain a new range.

Euro gains as dollar weakens

The euro currency is rising to a new three-year high. The gains come as the U.S. dollar fell sharply mid-week. The declines in the dollar comes on the back of new proposed stimulus by the U.S. Congress. While this has not yet been passed, the dollar fell due to speculation.

For the moment, the EURUSD has cleared the key resistance level of 1.2000 and is even trading at 1.2144 briefly. However, the current pace of gains remains brief and could lead to a correction. The Stochastics oscillator also looks overstretched.

As a result, there is a strong reason for EURUSD to post a correction. This correction could see a move back to either the 1.2000 level or even down to the 1.1900 level.