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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 12/08/20

Is the gold rally over?

XAUUSD 1208

The precious metal, which baffled just about everyone and staged one of the strong rallies is looking weak. Gold prices are down over 3.8% intraday as the precious metal is erasing gains rather sharply. The pickup in bearish momentum comes on reports on the progress of the Coronavirus vaccine and the US stimulus as well.

From a technical perspective, we expect the precious metal to extend declines down to the 1900 level where we have a support level that could be tested. Minor support area is also seen near the current 1960 levels. Therefore, we could expect gold prices to perhaps make a pullback from here.

To the upside, gold will now have to erase losses and also make a new all-time high to convince investors. As a result, we think that gold prices will be either settling into a range or posting even bigger corrections in the near term.

Crude oil sticks to the 42.0 level

WTI 1208

Oil prices are up nearly one percent on Tuesday. Yet, despite the modest attempts, the commodity is unwilling to budge from the 42.00 level. Oil prices have been stuck near this level since early July and attempts to breakout higher have failed.

However, this strong period of consolidation might lead to a possible breakout anytime. The bias remains to the upside for the moment. But the direction of the breakout will really be determined based on the momentum in price action. As a result, there is a mixed possibility.

In terms of support, the 50-day moving average inches closer to the price action, which could keep prices consolidated. To the upside, while oil prices are trading above the 42.00 level, further gains are needed to keep the momentum alive.

EURUSD attempts to pare losses

EURUSD 1208

The common currency is looking somewhat bullish as it attempts to recover from the two-day loss. This comes as the USD's recent rally is showing signs of weakness once again. With the EURUSD trading above the 1.1700 handle, the bias is firmly to the upside.

For further gains to come, the common currency will need to breakout above the 1.1900 level in the near term. To the downside, if the euro loses the 1.1700 handle, then we expect to see prices correcting down to the 1.1600 level next.

This move will also weaken the upside bias. From the current outlook, it looks like investors are waiting for the news out of Washington on the government's stimulus bill. This could potentially weaken the US dollar and will be supportive of the euro.

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