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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 08/05/19

Gold looks choppy as bias mixed

Gold 0805

Gold prices were seen surging in the first half of the week. The gains came after the markets opened to the news on Monday about Trump’s renewed threats on China. The trade war concerns have pushed gold prices higher as a result and could potentially shift the bias to the upside.

On the 4-hour chart, we see a potential inverse head and shoulders pattern that is taking shape. The neckline resistance is formed at 1285. A breakout above this level will potentially validate the upside bias in gold. The minimum target is seen coming in at 1302 at the very least.

However, the inverse head and shoulders pattern hasn’t formed yet and there is still scope for prices to be rejected near the 1285 level. To the downside, the rising trend line could offer dynamic support.

WTI crude oil has more room to the upside

WTI 0805

Crude oil prices are seen recovering from the declines from earlier this week. While prices fell to lows below 63.00, we notice a rebound off the 60 handle. This could lead to a modest upside bounce in prices as a result.

On the daily chart time frame, oil has formed a hidden bullish divergence. This could potentially see oil prices attempting to push higher in the near term. Watch for the 63 level to be retested again for resistance.

A reversal at this level could mean that the top has likely formed in oil prices. A successful reversal based on a daily close could confirm the downside. The lower support level at 57.50 remains a key level of interest that could be tested in the medium term.

EURUSD back to range trading

EURUSD 0805

The common currency was seen attempting to breakout higher but the price level near 1.1200 – 1.1224 has proven to be strong. The reversal off this resistance level could mean that the common currency is likely to extend the declines in the near term.

While the downside target is unsure for now, watch for the formation of a higher low. This could potentially indicate a move lower if prices fall below the recent pivot low of 1.1140. Alternately, we expect the EURUSD to continue trading sideways.

The new lower corridor is likely to be established within 1.1200 – 1.1120 region. A breakout from this new range would be required in order for the EURUSD to push higher.

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