Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 05/07/19

Gold trades flat near six year highs

Gold 0507

Gold prices quickly recovered from the slump earlier in the week. However, price action was muted near the highs. At the time of writing, the precious metal was seen trading at the highs of 1420.

The upside momentum looks to be exhausted for the moment. This is evident from the Stochastics posting a lower high in response to the higher high prices. This bearish divergence is indicative of a possible correction to the downside. The initial support at 1360 is one to be watched. The steeper trend line break could potentially signal a move lower to 1360.

A breakdown below this level could potentially signal a move lower. The next lower support is seen at 1320. Following this, the long term trend line is likely to act as dynamic support.

Crude oil consolidates at support

WTI 0507

WTI Crude oil prices briefly slipped below the support area of 57.50 but price action quickly reversed gains. The retest of this level could see prices consolidating near this level for a short period of time.

However, failure to break past this level could signal that resistance is established. This will open the way for oil prices to post declines down to the 50.00 handle. But for this to occur, oil prices will need to break down below the previously established lows.

There is a risk that oil prices could reverse the losses mid-way in order to post a reversal back to the 57.50 handle. In the near term, we expect oil prices to remain within the range of 57.50 and 50.00 level. A breakout from this level will signal further gains in the near term.

Euro subdued near previous lows


The euro currency was seen trading flat over the past few days. This comes amid lack of economic data. The U.S. markets were closed on Thursday. With not much of information coming out from the Eurozone, the EURUSD currency pair was muted for the most part.

In the near term, we expect the currency pair to potentially establish the direction. This could likely come from today’s payrolls report. A weaker than expected report could shift the focus to the upside in the currency pair.

The markets expect to see a weaker payrolls report given the recent ADP release. However, a surprise beat on the estimates could push the euro down to test the 1.1250 level of support.

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