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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 11/09/19

Gold looks poised to bounce higher

Gold 1109

The precious metal was easing back after testing recent highs. The declines came on the back of improving risk sentiment in the markets. The cool off of trade narrative between the U.S. and China also helped investor sentiment. As a result, gold prices fell for four consecutive sessions.

Price action broke past the psychological support level of 1500 to test a four-week low. Support is seen at the 1497 region. But with the Stochastics oscillator well into the oversold level, and a hidden bullish divergence, there is scope for an upside bounce. The initial upside target is seen at 1522.

A breakout above this initial resistance is required to formulate the bullish bias. Failure to break past this level will push gold prices lower again. This could also confirm the downside bias in gold. The formation of a lower high could see the precious metal breaking past the support area of 1497 to correct towards the 1440 handle.

Crude oil breaks out higher from consolidation

WTI 1109

WTI Crude oil prices posted gains for the past five consecutive sessions. But after prices reached a six-week high of $58.73, price action looked somewhat bearish. This comes ahead of the weekly EIA crude oil inventory report. Most of the gains in oil prices came after Iraq announced that it will cut oil production.

The production cuts come amid higher than expected production levels. Iraqi oil minister said that his state will respect the OPEC limits. The pullback in oil prices comes as price action is likely to seek a modest correction. The breakout from the symmetrical triangle gives a bullish outlook for oil.

The main upside target is seen at the resistance area of $60. A retest of this level will confirm the move to the upside. But a breakout above this level is required for further gains. To the downside, the breakout area of 56.00 is likely to be tested for support ahead of further gains.

EURUSD trades flat ahead of ECB meeting

EURUSD 1109

The euro currency was seen trading flat near the lows as investors await to hear details from the ECB’s monetary policy meeting. The common currency managed to lift off the recent lows but price action has remained muted over the past few sessions. This is expected to continue as investors look to the fundamentals for cues.

The bias in the EURUSD remains mixed, although there is scope for an upside breakout. The previously breached support area of 1.1129 – 1.1111 region could be the near-term target. Establishing resistance once again near this level will confirm the downside in the currency pair.

However, the trend line is acting as dynamic support, which could keep prices biased to the upside. Overall, the EURUSD currency pair will need to break past the recent lows to confirm further downside. There is scope for a decline to 1.0900 level depending on the outcome of the ECB meeting.

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