Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 09/08/19
Gold rises to new six year high
The precious metal was seen rising to a fresh six year high, as prices briefly topped the $1500 an ounce level. The gains came on the back of strong risk aversion over the week as investors fled to safe haven assets.
The strong rally comes as gold prices have been maintaining strong gains. However, it is likely that gold prices could be in for a correction in the near to medium term. We expect to see a correction down to the 1440 level.
With prices surging off the resistance level, we could expect a retest of this handle to establish support. A rebound off this level will keep the gains to the upside. Further gains will see gold prices rising only above the current highs of 1500. Thus, it is quite likely that gold prices will remain flat within the 1440 and the 1500 level.
WTI Crude oil falls on surprise build up in inventory
Oil prices fell sharply over the past few days. The declines accelerated as oil broke past the descending triangle pattern. Support was established at 56.00 which was eventually breached. The declines to the 52.00 level marks the completion to the downside breakout.
The Stochastics oscillator remains in the oversold level. This potentially gives rise to a modest correction to the upside. A successful rebound off the 52.00 level, we could expect oil prices to retest the 56.00 level. A retest of this level will mark the resistance level being established.
In the near term outlook, oil prices will be subject to the fundamentals. The strength of the U.S. dollar is also something to bear in mind. The greenback remains somewhat mixed. These are some of the factors that could possibly impact oil prices in the near term.
EURUSD remains flat near resistance
The EURUSD currency pair, after posting strong gains off the lower support level near 1.1129 – 1.1111 managed to rise to the resistance area. The resistance level of 1.1224 – 1.1200 level is proving to remain strong.
As a result, the common currency has been stuck in the range. The EURUSD has closed flat for the past two consecutive days. This could possibly see the euro currency breaking out in one of the directions.
Given the fact that the currency pair bounced off the lows, any downside correction could be limited. Thus, it is likely that we could see another leg to the upside. The falling trend line will be acting as dynamic resistance in the near term.
