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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 10/01/19

Gold forms a near double top pattern

Gold 110119

Gold prices posted a rally on Wednesday following the release of the Fed minutes. The price of the precious metal surged to the previously established highs around the 1297 - 1296 levels before easing by Thursday's session.

The formation of the lower high in price indicates that gold prices have formed a near double top pattern, although not perfect. With the support seen at 1280 handle, the downside risks increases. A breakout below 1280 could potentially lead to declines in gold prices.

This opens the way to a minimum downside target of 1263 at the minimum, but with the support pending at 1250, further declines cannot be ruled out. An alternate scenario being that the 1280 support will hold up once again. This could mean that gold prices would remain in the range above the 1280 handle. However, with the momentum showing signs of exhaustion and the support at 1280 being retested multiple times, the support could eventually give way to the downside correction we are looking at.

Crude oil breaks past the $50 handle

WTI 110119

WTI Crude oil prices posted a strong surge over the week as prices break the 50.00 handle with relative ease. The strong momentum pushed crude oil prices even higher with the new upside target at 54.00 coming into focus.

However, considering the fact that the rally has seen little to no pullback to establish support, the rally is starting to look weak.

Given that fact that WTI crude oil prices are vulnerable to the OPEC comments, we could expect to see a correction at some point. The recently breached support at 50.00 is the most likely target but we anticipate that the declines could be steeper.

The technical support at the 46.00 - 47.00 level is quite likely to be tested in case of a corrective move in oil prices. Alternately, if the current momentum holds up, oil prices could be seen pushing higher to test the 54.00 handle.

It is very likely that in this scenario, oil prices could very well hit resistance at the 54.00 level in which case the price level of 50.00 could be the initial downside target.

EURUSD breaks its range

EURUSD 110119

The euro currency eventually managed to breakout from the sideways range that was formed over the past few weeks. The upside breakout has resulted in the ascending triangle pattern being validated.

However, despite the strong gains, the EURUSD was seen easing back from the highs. The declines could potentially push the euro currency to test the breached resistance level at 1.1450.

Establishing support at this level could establish the case for the upside bias in the EURUSD. The minimum upside expected is 1.1650 with price action likely to briefly push higher. As long as the support at 1.1450 holds, the EURUSD currency pair is likely to rally in the coming weeks.

Alternately, if the support fails, this could invalidate the upside bias and push the euro currency back into its previously established range.

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