ADVERTISEMENT



Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 08/07/20

Gold prices in the lead as risk off sentiment rises

XAUUSD 0807

The precious metal was trading strongly higher on the day, inching ever closer to the 1800 level. The gains in the precious metal comes on the back of stronger risk aversion. The resurgence of the pandemic is making investors wary, leading to the flight to safety.

Despite the gains, note that gold prices are trading sharply within a rising wedge pattern. This potentially suggests that prices might snap back lower, following a test of the 1800 level. Considering that this price level wasn’t tested in under a decade, it could see some strong selling pressure.

To the downside, we see the 1730 level as the support area. A retest of this level is likely in case of a move to the downside. However, for now the rising trend line might be able to offer some short term support. A lower high formation after a test of 1800 could potentially confirm the downside.

Oil trades mixed on concerns of virus spike

WTI 0807

Investors were cautious on Tuesday amid concerns of renewed lockdowns due to the pandemic. Risk aversion was back in the market weighing on oil prices as a result. The declines came despite Saudi Arabia raising its official selling prices for crude oil for August.

For the most part, oil prices continue to trade rather flat. Prices are strongly consolidating near the 40.00 level. Unless we get to see a strong move above the 40 handle and potentially a close above 42.00, you could expect this sideways trading to continue.

The lower end of the support is near the 38.15 level. We expect prices to hold up near this level in the short term. But a close below this price point could potentially accelerate the declines further. Below the 38.15, the next target of interest is at the 36.00 handle.

Euro remains weak against a stronger dollar

EURUSD 0807

The euro currency is on the backfoot, as it shows signs of weakening albeit trading within the range. The common currency was weaker as the US dollar surged in demand. This was due to the risk off factor in the market, making the USD a safe haven bid. Economic data from the Eurozone continues to show a deeper recession than initially expected.

Price action saw a brief spike and it is quite likely that the euro currency will settle with an inside bar pattern. This potentially sets the stage for a breakout in either direction. To the upside, the euro must breakout above Monday’s high of 1.3456.

To the downside, the price level of interest is at the 1.2434 handle. A close this level will see the euro currency likely to test the lower support area near 1.1100 which has remained elusive until now. But most the gains or losses will be largely driven by how the US dollar reacts in the coming days.

Read 143 times

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

Newsletter Subscription Form

You are more than welcome to subscribe to our Newsletter and be among the first who get to hear about regular updates on forex and other related news, brokers' updates, websites' changes and more!
I agree with the Terms and conditions and the Privacy policy
Thank you!