Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 13/03/20

Gold falls as investors disappointed by fiscal measures

The precious metal followed the route of its equity classes and declined lower. The declines come despite rate cuts from the BoE, the BoC and the Fed. Investors were hoping for a co-ordinated global stimulus plan. But this was shortlived as the measures undertaken failed to impress investors.

Price action in gold shows over 3.28% declines on an intraday basis. The precious metal has cleared the previously held support level of 1573. However, price needs to close strongly below this level to confirm further downside.

For the near term, we expect to see a minor pullback. Any near term retracements could ofcourse attract new short sellers into the market. This keeps the precious metal biased to the downside. The major downside target is seen at 1550 followed by 1523.

Oil prices continue to reel under price wars

The talks between Saudi Arabia and Russia failed to provide any positive news for oil traders. Furthermore, Saudi Arabia said that it wold sit out from the March 18th OPEC+ meeting. Demand for crude oil is expected to slow as OPEC's latest reports show that global economic growth will be near zero.

Oil prices are retreating, giving back the modest gains made earlier during the middle of the week. However, the support level at 28.00 is likely to hold oil prices from falling further. This could mean that we anticipate a modest consolidation taking place near the lows.

In the event that prices fall below the 28.00 handle, the declines will need to come sharply, suggesting that the downside is likely over for now. Watch how prices react as they approach the 28.00 handle to gauge any potential reversals higher.

Euro gains as ECB holds back from further rate cuts

The European Central Bank's monetary policy meeting on Thursday disappointed investors. The ECB did not cut rates, which are already in the negative territory. Furthermore, the ECB announced stimulus measures, which did not impress investors. The euro briefly surged on the news.

The EURUSD is now trading below the 1.1100 handle. The strong declines have erased some of the gains made earlier in the past few weeks. The lower support level at 1.0958 comes back into the picture. If this level can stall the declines we expect some sideways range to appear.

To the upside, price action will need to retrace the current losses. Given that the bearish momentum is strong, we do not expect this to happen in the near term. There is of course a risk of prices falling further. But a lot will depend on the fundamentals.