Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 10/07/19

Gold muted near the highs

Gold 1007

The precious metal was seen trading flat after a strong run in the previous weeks. The break of the rising trend line could however change the direction in gold prices. The initial support is seen at the 1360 handle which could be tested on the downside.

The precious metal awaits for clues from the Fed President Jerome Powell. Powell is scheduled to give his testimony to the U.S. Congress later today. On the agenda is the Fed’s forward guidance. The markets are mixed in the run up to today’s speech.

From a technical perspective, gold prices could be testing the 1360 support in the near term. However, this will keep the upside bias in gold intact. A break down below the 1360 level could change the direction. The next lower support at 1320 will come into focus.

Crude oil rallies, clearing 57.50 support

WTI 1007

Oil prices managed to post some strong gains on Tuesday. WTI Crude oil gained 1.35% on the day. This came after API reported a larger than forecast drawdown in oil stockpiles. Later in the week, the official EIA inventory report will be coming out.

After oil prices closed above the 57.50 level of resistance, we expect the upside momentum to continue. Oil prices could easily test the 60 handle in the near term. This will bring crude oil prices back to the familiar resistance area.

But oil prices will need to breakout above the 60 handle in order to post further gains. The resistance area of 63 – 60 will be closely watched. If oil fails to breakout higher above this level, we expect further downside, back to the 57.50 handle.

Euro testing the support level


The common currency was seen extending the declines on Tuesday. Price action has pushed the EURUSD back to the familiar support area of 1.1224 – 1.1200 level. This could potentially keep the EURUSD biased to remain flat at this level.

In the event that the currency pair falls below this support area, we anticipate further losses that will push the EURUSD to previously established lows. Overall, the currency pair remains range bound within the 1.1400 and 1.1200 levels.

To the downside, we could expect the currency pair to extend declines down to 1.1150 level where the initial support resides. In the event of a rebound in prices, the gains could be limited within the 1.1400 handle.

Read 551 times