Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 08/04/20
Gold rallies to a one-month high
The precious metal continues to maintain strong gains as prices tested a one-month high on Tuesday. This comes after a steady few sessions which saw gold prices rising rapidly. With the equity markets stabilizing, price action in gold is also back to normal levels of volatility. This comes amid a global coordinated effort to stem the pandemic outbreak.
In the near term, the current gains could see a possible pullback. But the initial support at 1620 will be coming into play. This is the level where the declines in gold prices could stall. A breakdown below this level will trigger a move much lower. The next target is at 1580.
To the upside, gold prices need to breakout above the current highs of 1671.95. This will push prices to the 1700 level that was briefly tested prior to the declines. Despite the recent gains, the mid-term trend remains range bound. Unless we see a breakout above 1700 or a break down below 1460, gold could remain trading flat.
Crude oil stuck at resistance
Oil prices posted a modest rally rising off the lower levels near 20 in the past few sessions. This momentum pushed oil prices to test the resistance level near 28.00 as we were expecting. The gains come amid President Trump’s push to mediate between Saudi Arabia and Russian. However, the OPEC meeting due to be held this week got postponed, pushing prices lower.
In the near term, we expect oil prices to hold steady within the 28 and 20 levels. The current retracement is in line with the expectations that prices could retest the breakout from the minor trend line. As long as oil prices don’t fall to make fresh lows, we expect the upside to prevail.
Therefore, watch for a move towards the 22.30 – 22.00 region. If there is a higher low forming, then we anticipate a possible breakout to the upside. Above the 28.00 resistance, the next main target is 42.00
Euro rebounds off support
The euro currency’s gradual declines have pushed prices down to the lower end of the range at 1.0784. However, following this slump, the common currency is posting some strong gains. This comes amid the US dollar taking a breather. Having said that, there is scope for the greenback to renew its bullish momentum.
In the near term, we expect the EURUSD to stay within the levels of 1.1000 and 1.0784 range. Only a strong breakout from this level could see some direction being established. However, given the current conditions, we do not expect much breakthrough in the near term.
The Stochastics oscillator is pointing to a possible move to the upside. Therefore, price action needs to breakout above 1.1000. This will then put the previous pivot highs at 1.1140 and 1.1448 as the next levels for the common currency to target.
