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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 06/03/20

Gold resumes the bullish trend

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The precious metal has seen a volatile trading week with prices going back and forth and with strong momentum. This reflects the investor reality as fears of the epidemic has caught on to the equity markets. As a result, gold has become one of the flight to safety assets to hold for investors besides the U.S. Treasuries.

Price action is currently testing the previously formed highs near 1660 level. A breakout above this level could trigger further gains in the near term. This could push gold to even newer highs as the fear trade takes over the market.

From a technical stand point, watch the possible short term inverse head and shoulders pattern emerging near the highs. This pattern could signal a possible continuation to the upside on a successful breakout.

Crude oil trading weaker despite OPEC cuts

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Crude oil prices are trading a tad weaker on Thursday. This comes as OPEC nations agreed on Thursday at a summit in Vienna to cut oil production by 1.5 million barrels. However, Russia is yet to conform to the OPEC decision. The move by OPEC comes as nations hope to ride out the slower demand due to the virus outbreak.

The current pullback to the modest retracement will be interesting to watch. There is scope for prices to slip to the lower support area at 45.20. If support holds, then it would form a higher low. This is indicative of a move to the upside.

Price action will need to break past the 48.00 handle in order to maintain the bullish gains. The next upside target is at 52.00. But if prices fail to stabilize near the 45.20 region then we expect further declines to come on a break down below the previous lows of 44.25.

EURUSD consolidating within a range

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The common currency is maintaining strong gains over the past few weeks. Most of these gains come due to a decline in the U.S. dollar. For the moment, price action has stalled but this could be decisive. A breakout above the resistance level could trigger further gains.

To the downside, the support area near 1.1130 and 1.1111 will be crucial. If prices slip below this level then we could expect the EURUSD to settle back into a long term range within the aforementioned price level and the lower support near 1.958.

Alternately, the upside looks interesting with the next main target seen at 1.1400 that was last tested in July 2019. There is scope for the euro to fall as investors expect the ECB to possibly announce a rate cut.

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