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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 09/09/20

Gold consolidation could trigger a breakout soon

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The precious metal started on a quiet note this week. This comes as the US markets were closed in observance of the Labor day holiday. Price action in the commodity inched lower on Monday and we see a similar pattern taking place on Tuesday as well. Prices are probably finding support off the 50-day moving average.

Given the recent strong consolidation in the precious metal, there is a strong change that we will see a breakout in the near term. To the downside, price action looks a bit supported for now. We have a confluence of te 1900 level of support and also the 50-day moving average. Both of these combined could help gold prices from falling.

To the upside, while gold has been forming lower highs, a breakout could change that. Therefore, watch the level of 1950. If prices breakout above this level, then we could see the trend shifting to the upside once again.

Bearish oil market is back

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WTI crude oil is seeing one of its worst days in recent times once again. Price action is down over seven percent on the day. This comes as renewed concerns of global demand has left the commodity open to declines. Over the past few days, Saudi Arabia also cut its oil prices for its customers which started off the weaker decline in the commodity.

Given that oil prices were consolidating for more than a few months, the current declines are not surprising. Price action managed to break past the support from both the 50 and 200 day moving average. This led to a strong decline in prices on Tuesday, after the US markets were back in business.

The current declines in crude oil could see a possible retest of the 30.00 level. Given that prices failed to test this level for support previously, the declines could probably stall once prices hit the 30.00 level.

EURUSD trades weaker in the run up to ECB meeting

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The euro currency has started giving up the gains after prices tested the 1.2000 handle just a week ago. Following this, the declines in the euro were triggered by ECB officials who expressed concern on the currency's exchange rate. A higher euro is expected to hit European companies hard as they attempt to restart operations after the pandemic.

The euro is posting a steady decline having cleared the 1.1800 handle only recently. Still, for any strong declines to occur, price action needs to be a bit more convincing. At the current levels, the EURUSD is at risk of a rebound which could easily trap weak short positions.

Watch for the EURUSD to clear the 1.1800 handle firmly, and possibly even establish resistance at this level. Only this will confirm a move down to the 1.1600 handle where support will most likely form in the near term.

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