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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 10/04/20

Gold prices extend gains on new stimulus plans

XAUUSD 1004

The precious metal is up over 2% on the day. The gains came after the U.S. Federal Reserve announced a fresh stimulus plans of about $2.3 trillion dollars. This has helped the market sentiment to improve, giving rise to gold prices. As a result, price action caught a bid pushing prices higher.

The current price action has put the gold price back near the 1679 handle. This was the same level that was previously tested on 9th of March. Failure to breakout above this level could signal a move to the downside. This also triggers a double top pattern.

The minimum downside is seen at the 1344 level. Alternately, if gold prices breakout higher, the we expect move higher. This could push gold prices to new highs. Given the current volatility we could expect prices to move erratically. Also considering the fact that the U.S. and European markets are closed on Friday, we could expect some sudden strong moves over the weekend.

WTI Crude oil stays volatile on OPEC rumors

WTI 1004

Crude oil prices are volatile on Thursday. This comes amid talks that Saudi Arabia and Russia are in talks to curb production by 20 million barrels per day. Given the reports, oil prices surged ahead, and briefly rose to the 28.00 levels. However, prices eased back lower towards the closing hours of the sessions.

For the moment, oil prices remain range bound within the 28.00 and 20.00 level. The Stochastics oscillator remains rather flat and indecisive for the moment. To the downside, the price level of 24.00 could be tested for minor support.

In the medium term, there is a strong hidden divergence that is forming. This could see a possible move to the downside. As long as the price level near 24.00 holds, we could anticipate a move higher. This comes amid a higher low being formed indicating a move higher. But a breakout above 28.00 handle is needed to confirm the upside toward the 42.00 level.

Euro continues to maintain gains

EURUSD 1004

The euro currency is seen posting some modest gains right after slipping to the support level of 1.0784. Price action in EURUSD remains erratic amid the USD strength. The dollar is easing back after the Fed’s new announcement on the stimulus program. This could put the euro to push the upside.

In the near term, we expect the EURUSD to trade within the 1.1000 and 1.0784 levels. Unless we see a strong breakout from one of these levels, we do not expect to see much gains or losses.

To the downside, the declines could be limited to the trend line which could act as dynamic support. Alternately, to the upside, price action needs to breakout above the 1.1000. This could push price back to the previous highs of 1.1141 which could act as resistance once again.

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