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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 05/06/20

Gold prices rebound on ECB stimulus


The precious metal managed to recover following the losses from the day before. Gold prices rebounded after the ECB announced new stimulus measures. The stimulus measures come right on the back of Germany also issuing new fiscal measures and on top of existing relief packages. This led to a modest risk off sentiment.

Price action is however confined within the ranges from Wednesday. This could potentially turn out to be an inside bar. Thus, an impending breakout is quite likely from this. However, gold prices are trading back within the range of 1730 and 1684 levels.

As a result, we could expect price action to once again maintain itself within this range. An upside breakout above this range could potentially renew bid for a possible move higher. But gold needs to post strong gains and rise above previous highs to confirm this. Until then gold bias is mixed.

Oil markets stay volatile on OPEC and inventories

WTI 0506

Crude oil markets are trading somewhat volatile in the run up to the OPEC+ meeting. WTI crude oil was somewhat weaker on doubts whether OPEC nations will adhere to production cuts. Meanwhile, rising US inventories also contributed to the decline in oil prices. Saudi Arabia and Russia, two of the world's biggest oil producers, want to extend cuts of 9.7 million barrels per day (bpd) that major producers agreed to in April.

Following a doji close on Wednesday, oil prices are currently bullish. But price action is within the highs and lows from the previous day. This will suggest that prices will be suppressed for a while ahead of a breakout. Given that the current momentum is bullish and in favor of further gains, watch for a breakout of the doji high.

This will potentially accelerate the gains in WTI crude oil prices which will eventually rise to the upper level near 42.00. But in the event of a downside breakout, WTI crude oil could be potentially breakout down lower. The lower support level near 28.00 remains within reach.

Euro rises after ECB ramps up stimulus


The euro currency was boosted on Thursday after the European Central Bank announced additional stimulus measures. The ECB announced that it would increase its emergency asset purchase program while maintaining its stance to ease policy even further. The ECB increased the size of the pandemic emergency funding by 600 billion euro, bringing it to a total of 1,350 billion.

As a result, boosted by the bullish fundamentals, the euro currency is up over 1% on Thursday. This puts the currency pair within reach of the 1.1400 handle. With the price level near 1.1147 breached, expect further gains in the near term.

Any pullback in the EURUSD currency pair will see a retest of the 1.1147 level where resistance will most likely form. Above 1.1400 level, the next main target for the EURUSD is seen at the 1.1446 close. Only a close above this level will confirm the uptrend in the EURUSD currency pair.

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