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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 05/08/20

Gold prices hold steady toward $2000

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The precious metal is posting gains for three daily sessions so far. Price action is however just a few dollars off the key 2000 level that is being closely watched. We expect the move to continue but profit taking could see resistance being formed near this key psychological threshold.

In the short term, the 1950 level is offering support. Therefore, any corrections can be valid only after gold prices close below this support area. Below the 1950 handle, the next level of interest is the 1900 region, making it the next support area to watch for.

To the upside, if price action closes above 2000, then there is scope for gold to push even higher. The next probable price area will be the 2500 region. But with key economic events lined up this week, we expect to see price holding steady at or below the 2000 level.

Crude oil continues to trade flat

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Oil prices haven't made much moves this week. Despite the earlier declines, prices in the commodity have recovered somewhat. Still, oil prices are caught near the 200-day moving average. And as a result, we have the range between 42 and 40 still holding up.

To the downside, we already saw oil slipping below the 40.00 handle. But this was later seen with a push higher only for price to hit the 200-day moving average. Lack of fundamentals are also keeping oil prices subdued.

Thus, the price level near 42.00 remains hard to break at this point. Watch out for the Stochastics which is currently turning bullish. If the bullish momentum picks up, then we expect a move to the upside. Finally, oil prices might be able to breakout above the 42.00 handle.

Euro on a three-day losing streak

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The common currency is trading weaker for the third consecutive day. This comes after the euro hit 1.1900 just last week. The strong pullback suggests that investors are cautious ahead of the key US data due over the week, culminating with the payrolls report on Friday.

For now, there is no indication that the euro will continue to move lower. Unless we get to see a lower high forming. The price area near 1.1700 might be able to keep the common currency from posting further declines. It could also offer a short term rebound for the euro.

Below the 1.1700 level, we then have the lower support area at 1.1600. This makes for a key price area that could be tested if the euro continues with its correction. This bias might change if the economic data from the US turns out worse than expected. But for the moment, we think that the gains in the EURUSD are overdone.

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