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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 13/05/20

Gold prices hold steady amid doubts of economies reopening


The precious metal is trading firmly near the consolidation levels seen since the past few weeks. The bias remains flat amid concerns of a second wave of the pandemic outbreak. This comes as many economies are seen relaxing the restrictions which were in place for approximately two months.

After posting declines for two consecutive sessions, gold prices are attempting to pullback higher. However, prices remain confined to the range from last Thursday. Unless we see any meaningful breakout, this sideways range could persist.

The bias is also rather flat as the Stochastics oscillator shows that the moment is flat. Yet, given the prolonged consolidation, gold prices could be on the verge of a breakout in the near term. Given that the overall trend is to the upside, gold prices could be seen pushing higher on a close above the previous highs of 1740.

Oil prices supported as UAE promises more oil cuts

WTI 1205

Crude oil prices are likely to gain in the aftermath of UAE announcing more production cuts. The Ministry of Energy and Industry said that the UAE will raise production cuts by an additional 100,000 bpd from June. This brings an extra cut to the production cuts that are already in place since May.

However, oil prices did not react much. Prices rose about 2% intraday as the sideways range continues to remain in play. WTI Crude oil prices are struggling to breakout above the 28.00 level where resistance is firmly found.

As a result, we expect oil prices to remain range bound within 28.00 and 20.00 level. We continue to watch the outcome of the potential inverse head and shoulders pattern. But for this, we need oil prices to decline toward the 20.00 level.

EURUSD shows signs of modest gains but remains rangebound


The euro currency is showing some strength following the USD taking a backseat. This comes as the latest inflation figures from the United States showed that consumer prices were down 0.8%. This was slightly more than the forecasts of a 0.7% decline.

Technically, price action remains firmly above the support area of 1.0784 region. This could mean that there is scope for some upside. But the overall range remains with the resistance level at 1.1000 still holding strong. However, a daily close on a bullish note could signal some continuation higher.

But at the same time, there is also a risk of prices pulling back lower. This would put some stress on the support area of 1.0784. If price action falls below this level of support, we expect the EURUSD to drift lower and perhaps post fresh lows.

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