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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 06/12/19

Gold holds steady ahead payrolls data


The precious metal has been a bit volatile but price continued to post modest gains. This comes amid mixed reports on the trade negotiations between the United States and China. A weak path of economic reports from the U.S. is also partly responsible for the gains in the safe haven asset.

Technically, price action is close to the psychological level of 1480. Price action has failed to breakout above this level since early November. Therefore, if gold prices breakout above 1480, we anticipate the momentum could push the prices to the 1500 psychological level.

For the moment, watch the hidden bullish divergence that is forming on the gold chart in the daily time frame. This could potentially trigger a reversal if validated. A reversal around the 1480 handle will confirm the level as resistance while gold prices could slip to the 1440 region.

Crude oil advances as OPEC meeting gets underway

WTI 0612

Crude oil prices have posted sharp gains over the past few days. This comes as investors try to price in the outcome from the OPEC meeting. The semi-annual two day OPEC meeting got underway. There is speculation that the OPEC members could deepen the production cuts, which could be bullish for oil prices.

However, the gains over the past few days shows that traders are already discounting the production cuts and any other bullish news. Despite the gains, oil prices are back at the 58.00 handle. This is proving to be a strong resistance level in the short term. Unless price breaks out above this level we do not expect further gains.

But in the event of a successful breakout, oil prices are on track to hit 60.50 level. This level was previously tested mid-September this year. In the medium term, the trend is flat. Oil prices have been trading within the 60.50 and 52.00 region since June.

EURUSD holds gains with NFP data due


The EURUSD currency pair managed to advance, taking advantage of the weaker U.S. dollar. The dollar has been in a steady decline since the start of this week and is down for five days so far. This comes as the U.S. economic reports paint a grim picture.

The Fed is expected to cut rates by March next year. But the euro currency is unlikely to move much as it remains in a sideways pattern. Currently, the resistance level near 1.1111 – 1.1129 is being tested. If this resistance level holds, then we expect a reversal in the near term.

To the downside, the support level at 1.0958 remains open for a retest. Given the fact that prices posted a pullback, forming a minor support level at 1.1000, we anticipate that the euro could be on track for a breakout higher.

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