Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 13/02/19

Outlook for gold remains mixed

Gold prices have been consolidating since late last week. Price action has remained almost flat near the highs. This consolidation has led to gold prices forming a potential bullish flag pattern on the daily time frame. Switching to the four hour chart, we can see a triangle pattern being formed near the highs. While gold prices remain flat, the outlook remains mixed at the moment. Depending on which way the breakout occurs, gold prices could either be posting strong gains or starting a correction to the downside.

To the upside, prices need to break past the 1320 level to target the 1340 region. This would mark the minimum upside objective of the bullish flag pattern. However, watch for the 1320 level to come in as strong resistance.

To the downside, if gold prices break down below 1300, we could expect prices to fall to 1280 support followed a move to 1240 thereafter. For the moment, the price action remains mixed.

WTI Crude oil back at resistance

Crude oil prices were seen reversing the declines after briefly slipping below the 52 handle. Price action quickly recovered pushing oil prices back to the 54 handle. However, there hasn’t been a strong close at this level which indicates a strong resistance level being formed.

Therefore, the outlook is to the downside, given the doji candlestick pattern that has formed on the four hour chart. A bearish follow through is required for WTI crude oil to potentially break down lower.

Minor support is seen at 52 level, but if this is cleared we can expect oil prices to test the 50 round number support quite quickly. Oil prices remain influenced by the external factors which could keep a bit of volatility in the commodity.

Euro attempts a reversal

The euro currency was seen posting strong gains just after slipping to a three month low. The reversal coincided with the support level we mentioned at 1.1312 - 1.1282. This also marks the neckline support of the head and shoulders pattern that we are watching.

Failure to breakdown below this support level indicates that the bearish pattern could be at risk. However, price action is seen currently testing the trend line which is seen to be holding up.

We expect to see some amount of consolidation within 1.1340 and 1.1300 levels. A breakout from this level could potentially mark the next leg in the movement in the currency pair. The upside resistance is seen at 1.1450.