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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 08/05/20

Gold prices trade flat ahead of payrolls report

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The precious metal offset the losses from the previous session, rising over 1% intraday on Thursday. This comes as gold prices are trading flat since the past six consecutive sessions. Lack of any new fundamentals have left price action in a void. However, this could change ahead of the Friday’s nonfarm payrolls report.

For the moment, the price level of 1708.50 remains key in gold. A breakout above this level could see the bullish momentum resuming. But this would mean that gold prices will have to rise above the previous highs just under the 1740 handle.

To the downside, gold prices are at risk of move lower to the 1643 handle. Establishing support at this level could keep price action fairly range bound within 1708.50 and 1643 levels. Given the overall movement in gold prices, we expect that price are consolidating. But this could also potentially trigger a bigger breakout in the near term.

Crude oil prices maintain a bullish stance

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WTI crude oil prices take a pause in the previous session, closing slightly bearish. However, a day later price action is once again attempting to breakout to new highs. The bullish rally comes on the back of improving global sentiment. With major parts of the world easing on the lockdown restrictions, there is hope for oil demand to grow.

From a technical perspective though, oil prices are trading under the 28.00 level. For the moment, this price level is acting as resistance. It was also previously tested in early April. If price action fails to breakout, then we expect to see prices retracing lower.

The lower support level at 20.00 will be critical. If the declines stall at this level, then we could be looking at a large inverse head and shoulders pattern. The 28.00 level will mark the neckline resistance level. A breakout above 28.00 will see prices rising to as much as 46.00 in the medium term horizon.

Euro falls back to support in the sideways range

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The euro currency is back near the familiar support level of 1.0785. This comes as the EURUSD is down for four consecutive sessions so far. The volatility in the EURUSD comes on the back of the dollar strength which has also been somewhat volatile, reacting to the general market sentiment.

For the moment, price action looks to be stalling near the support area of 1.0785. if this happens, then the EURUSD could be looking to rebound higher. But the gains will once again be limited to the 1.1000 level where resistance is most likely to form.

Even in the event of a breakout above 1.1000 level, the gains will need to surpass the 1.1400 level where the previous local highs have formed. To the downside, the next level of support is seen at 1.0600 which will be tested if prices breakdown off the 1.0785 region.

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