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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 05/06/19

Gold settles above 1300 after three day gain

Gold 0506

The solid gains in gold prices were seen stalling by Tuesday’s close. However price was well settled above the 1300 range. The doji close near the top end of the rally could however see either price posting a correction or a potential resumption of the trend back to the upside.

In the near term, watch for a dip in gold prices. A close below the 1320 level will potentially mark a correction lower. The initial support at 1300 will be the first target followed by a possible move to the 1290 – 1285 handle.

Establishing support near the 1285 – 1290 level will potentially confirm the upside bias. However, gold will remain range bound within the 1320 and 1285 – 1290 region in the near term. A breakout from this range will decide the further trend in price.

Oil prices could see some near term correction

WTI 0506

WTI Crude oil prices were seen holding the declines as price approached the 52 handle of support. The short term rebound in price could potentially see a reversal in the decline which could be a correction in the near term. The retest of the 57.50 handle for resistance will of course confirm the downside in oil prices.

The lower target at 50.00 remains key for oil prices. However, we expect to see a short term correction in price ahead of further declines. The Stochastics oscillator remains well oversold and could see a possible move to the upside in the near term.

Regardless, the correction in oil prices could potentially end with a retest of the 50.00 handle. We expect to see oil prices potentially marking an uptrend from the 50 handle.

Euro posts gains, rising to a two-month high

EURUSD 0506

The common currency was see trading with some volatility as price rallied to a two month high of 1.1277 before turning flat on the day. However, the common currency has managed to close above the 1.1224 – 1.1200 level comfortably.

The big test for the euro will come from this Thursday’s ECB monetary policy meeting. The central bank’s forward guidance will play a big role and could see some volatility in the currency pair. The downside looks capped for the moment.

To the upside, the EURUSD could be potentially attempting to test the 1.1400 level on a successful breakout from the long trend line. But in the event that the EURUSD will close below 1.1200 then we expect to see the sideways range still being maintained.

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