Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 11/03/20

Gold prices retreat on fiscal stimulus

The precious metal opened on Monday, rising briefly above 1700. However, towards the close, gold prices retreated and is currently trading bearish. This comes as various central banks and governments are making efforts to boost the economy via fiscal stimulus and lower interest rates.

The reversal near 1700 is in line with the view that a top has already formed for gold. For the moment, price action is testing the 1650 handle. If this support breaks, then we expect further downside in place. But a lot will depend on how prices will reaction to the ongoing fundamentals.

Even if the 1650 handle holds, the gains to the upside could be limited. A lower high formation is the most likely scenario in this instance. Unless gold can recover above 1700, we anticipate that the upside is nearing completion.

Crude oil prices recover after sell off

Oil prices opened on Monday, down over 30% at one point. The declines came after Saudi Arabia started a price war after Russia failed to come on board with production cuts. This led to prices falling to lows near 28 before settling somewhat higher a day later. Russia is now apparently in talks with Saudi Arabia in regards to crude oil production.

From a technical perspective, the decline in oil prices comes as prices tested the multi-year lows near 28.00 before bouncing back. But the gains might be limited for the moment. We expect oil prices to maintain a strong consolidation in the near term.

To the upside, the support area at 42.00 which failed could turn to resistance. However, the rebound might be stretched over the next few weeks. Unless there is a fundamental shock to the markets, we anticipate that crude oil prices have formed a bottom near 28.00 for now.

EURUSD retreats off a one year high

The euro currency has managed to rise sharply on the back of a weaker U.S. dollar. However, price action is retreating after the euro touched 1.1500 briefly on an intraday basis. Most of the gains have come on the back of investor panic.

With the ECB meeting due this Thursday, the currency pair could settle into a consolidation. Investors expect the ECB to announce additional stimulus measures. This comes as Italy, one of the leading economies has come a standstill due to the coronavirus outbreak.

In the near term, the EURUSD will be looking to the 1.1250 - 1.1200 level of support. As long as this support holds, the EURUSD could see some upside prevailing. But a break down below this level could push the currency pair back to its previous range.