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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 07/06/19

Gold on track to close the week with solid gains

Gold 0706

Gold prices maintained the strong upside momentum as price has now extended gains for nearly seven consecutive days. The upside in gold has put prices back near the late February highs of 1340.

The downside support is seen at the 1320 level which could be tested in the event of a downside correction. However, with the momentum staying strong, gold prices have the potential to extend the gains to highs of 1350 possibly.

The bias changes view only if gold can drop below the 1320 level. This will potentially open up the downside toward the 1285 handle where support will be tested once again. However, the bullish gains are likely to be maintained amid the dovish central bank and the global uncertainty due to trade.

Oil inches closer to the 50 handle

WTI 0706

Crude oil prices continued to extend the declines as price now nears the psychological support at 50.0. The declines come after the U.S. Energy Information Administration (EIA) reported a build up of crude oil inventory. This was in contrast to the expectations of a lower build up.

The increase in the inventory has kept the downside pressure in oil prices. Given the sharp declines, we expect oil prices to potentially stall near the 50.0 handle in the near term. A rebound off this level will likely see oil prices rising higher in the near term.

The recently breached support level at 57.50 will now act as resistance. For further upside, oil prices will need to breakout above this resistance level to continue to the next main hurdle near the 66.00 – 65.00 region.

Euro gains, testing the major trend line

EURUSD 0706

The common currency was seen finding support near the 1.1224 – 1.1200 level. After trading mixed, the bullish bias is likely to rise in the near term. At the time of writing, the EURUSD is seen testing the major trend line from late September 2018.

A breakout above this trend line is required in order for the EURUSD to extend gains higher. The next main resistance is seen at the 1.1395 region. A retest of resistance at this level will likely keep the EURUSD subdued and trading within the range.

However, in the event of a breakout above the 1.1395 level, we can expect to see the common currency rising to highs of 1.1623.

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