Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 08/02/19

Gold prices retesting the breached support level

GOLD 080219

Gold was seen reversing the declines on Thursday as the retracement pushed gold prices back to test the recently breached support level at 1310 for resistance. The breakdown of this support level has validated the head and shoulders pattern on the 4-hour chart.

The current retracement back to the breached support level could currently see this level turn to resistance. As long as this resistance holds, we expect the minimum downside toward 1295 level at the very least. However, considering that the next main lower support is seen at 1280, we could expect gold prices to slip toward 1280 to test this level for support.

Alternately, if gold prices edge higher, a breakout above 1310 could invalidate the downside bias and put gold prices on track to retest the 1320 level.

Crude oil slips from the 54 handle

WTI 080219

WTI Crude oil prices were seen steadily declining after failing to breakout from the resistance level at 54. The retest of this level came after crude oil prices briefly broke out to the upside above 54 and eventually failed to hold on to the gains.

The recent declines pushed oil prices to 52 and we expect the declines to continue toward the 50 handle. In the near term, there is scope for oil prices to rebound back to the 54 handle given the Stochastics positioning. Still, the gains are likely to be shortlived with the minor resistance at 53.35.

A reversal near this level could signal a move to the 50 handle with oil prices maintaining a bearish bias. There is scope for further declines to be extended if the 50 round number support gives way. This could push oil prices even lower to test the 46.85 region where support is pending a retest.

Euro reamins weak

EURUSD 080219

The common currency was seen posting steady declines over the week ever since the support at 1.1450 failed to hold the gains. The declines have now pushed the euro closer to the 1.1312 level of support.

On the broader timeframe, the EURUSD is likely to be forming a head and shoulders pattern with the neckline support seen at 1.1312 - 1.1282. A breakdown below this level could push the EURUSD down to 1.1000 level if the head and shoulders pattern is validated.

However, given the strong confluence of the horizontal support level and the trend lines, the euro could be seen posting a modest rebound from the lows of 1.1312.

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