Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 06/09/19
Gold prices drop as U.S. data unexpectedly stronger than forecast
The precious metal was seen erasing some of the recent gains after it fell over 2% during the day on Thursday. Gold prices, which were hovering near a six year high fell after economic reports from the U.S. turned out better than expected.
Fundamentally, the news about United States and China resuming trade talks from October also sent risk appetite higher. This led to falling demand in gold among investors. The decline in the gold prices however remains mixed. Given the current narrative, there is a possibility that the precious metal could inch higher in the medium-term outlook.
In the near term, watch for gold to clear the initial support at 1520. A daily close below this level will confirm further declines. However, the 1500 psychological support could hold the declines in the short term. The main support level at 1440 remains within sight if the bearish momentum continues.
Crude oil prices rise to a five -week high
WTI Crude oil prices rallied to a five-week high after the U.S. Energy Information Administration report showed a drawdown in inventory. Data showed that inventories shed 4.8 million barrels in the week ending August 30.
The gains in oil prices saw the support/resistance area of 56.00 being breached. The gains come as oil prices are breaking out from the triangle consolidation pattern. The current gains could keep oil prices rising to 60.64 level. Price action could be seen this resistance level being tested.
In the near term, the bullish momentum will continue to keep the upside pressure intact. With the receding uncertainty in regard to trade wars, oil prices could have room for the upside.
EURUSD retreats from a six-day high
The common currency rose to a six-day high on an intraday basis briefly. This came as the U.S. dollar was volatile on the day. Economic data from the United States was seen improving lifting the USD higher on the day.
Price action in the EURUSD continues to remain subdued. The upside in the currency pair could be limited to the resistance area of 1.1129 – 1.1111 level. To the downside, unless there is a breakdown below the low, we could expect to see a minor sideways range in the short term.
With today’s payrolls report coming out we could expect to see some short-term direction being tested. So, for the moment, we expect the currency pair to remain trading flat albeit near the lows.