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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 08/11/19

Gold resumes declines as investor appetite grows

XAUUSD 0811

The precious metal once again resumed its declines after a brief pause on Wednesday. Gold was down by over one percent on Thursday. The declines came after investor sentiment for risk appetite once again grew. The U.S. and China trade wars remain the main factor in fueling this sentiment.

The current declines puts the much anticipated correction to the downside in play. For the moment, the initial support at 1440 is key. If price test this level, we expect the move to potentially stall. XAUUSD could likely remain consolidated but supported above this level in the near term.

However, the longer term correction to the 1346 region is likely to occur. The retest of this level will mark a long established resistance level that was breached. Testing this level for support will indicate a firm correction to the longer term uptrend in gold.

Crude oil prices bounce back above the trend line

WTI 0811

Oil prices once again returned to the bullish mode. The gains came amid reports that Saudi Arabia was asking other OPEC members to cut production. This comes as the Saudi oil giant Aramco is expected to go public in December.

The news about cutting production gave a boost to oil prices. Behind the scenes the improving trade relations with the U.S. and China also contribute to the gains. The current price action indicates that the resistance level has been breached. With Wednesday’s price action briefly slipping back and Thursday’s gains, support seems to have been established.

This opens the upside in oil prices towards the 60.64 level of resistance. A retest of this level could potentially see a breakout higher. Alternately, if oil prices fail to breakout, we expect the consolidation to take place in the near term.

EURUSD on track to move back to a sideways range

EURUSD 0811

The common currency extended declines on Thursday, breaking below the support level of 1.1129 – 1.1111 level. Failure to capitalize on the gains and a brief consolidation near this level is showing price action shifting to the downside.

However, the Stochastics are currently oversold. This indicates that there is a chance of a pullback. But we expect this pullback to lead towards the same support level which could now be tested for resistance. If resistance is confirmed then the EURUSD will be posting further declines.

The lower support area at 1.0958 will be the next key level to watch as we have been mentioning earlier. A test of this level could keep the EURUSD supported for the near term. But there is a risk that a breakdown off the 1.0958 will lead to further declines.

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