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Gold prices post a steady gain on Fed dovish outlook


Gold prices are on track to post modest gains for a fourth consecutive session. The risk off sentiment has contributed to renewed demand in gold prices. The gains were cemented after the FOMC meeting on Wednesday. The Federal Reserve expects interest rates to remain zero atleast for next year, while questions remain on whether the central bank needs to add fresh stimulus.

The gains over the past few sessions have pushed gold briefly above the 1729.90 handle. But currently, price action is bearish. This could see gold prices falling back below the 1729.90 handle. It will once again keep price action range bound within the said levels.

The lower target is seen at the 1683 handle. Support might hold up here keeping prices range bound once again. But watch for a breakdown below this level. It will potentially open the way for a move lower to the 1643 level of support which is pending a test.

Oil prices slip on fears of a second wave of pandemic

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Oil prices are trading in the red after fresh fears that a second wave of the pandemic outbreak. This has dented the market sentiment. Oil prices fell amid concerns that this could lead to lower demand once again. Also, with prices rising in the recent weeks, producers have once again reopened their production units, which is also contributing to an overflow in the oil supply side.

The current declines are in line with the much anticipated correction. A strong bearish close will confirm a move potentially to the 32.00 handle. A close below this interim support might see oil prices extending declines down to the 28.00 level.

In the near term, there is scope for oil prices to rebound off the 32.00 handle. But this will only keep prices supported for a short period of time. However, the rebound could potentially result in a lower high forming, which will give a more valid signal of a correction.

Euro attempts to claim the 1.1400 handle


The euro currency is trading mixed after two sessions of strong gains. Price action is closing near flat. This comes as the US dollar has been in an extended decline over the past few sessions. However, with the risk off sentiment prevailing, there is a good chance that the US dollar could bounce back. Also, heading into the weekend, profit taking might also dent the gains in the euro currency for the moment.

The euro currency has managed to briefly hit the 1.1400 level. But price action was overwhelmed by sellers, pushing the euro currency lower. A breakout above 1.1400 could see the EURUSD rising to highs of 1.1450. This will be a retest of the 9th March close.

To the downside, 1.1300 will be crucial. A close below this level will signal a stronger correction. The next downside target is seen at the 1.1147 handle. However, a correction to this level will remain normal as we expect the bullish momentum to resume.

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