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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 13/09/19

Gold likely to continue further declines

Gold 1309

The precious metal attempted to post a modest rebound following Wednesday’s bullish close. However, price action saw a bit of volatility before settling modestly lower from the intraday highs. Gold prices remain caught within the 1522 – 1497 region currently.

However, this could change on a breakout from the range. The strength of the U.S. dollar, alongside the risk on sentiment will keep a check on the precious metal from rising further. The lack of forming a lower high is however a concern. We therefore expect to see some sideways range being formed ahead of a breakout.

The downside target in gold remains at the 1440 handle. But it is likely that we do not expect this to happen into next week’s FOMC meeting. A correction to the 1440 level and potentially down to 1346 remains on the cards for the moment. Watch the hidden bullish divergence on the daily Stochastics for now which points to a modest rebound.

Crude oil prices slip on fundamentals

WTI 1309

WTI Crude oil prices extended declines for three consecutive sessions into Thursday’s close. Price action pared gains after rising to highs above 58.00 earlier this week. The declines came largely due to the developing fundamentals and investor positioning.

The U.S. administration fired the national security advisor John Bolton during the week. The move was seen as somewhat positive for the oil markets. Bolton was known to be a hawk on Iran. Thus, the move saw traders anticipating the U.S. taking a softer stance on its foreign policy on Iran.

From a technical perspective, oil prices have been trading in a consolidation pattern. The breakout from the triangle pattern looks to have failed. This comes as price settled back inside the triangle pattern. We expect the lower support near 54.00 likely to hold the declines in the near term. But a move below this level could spell further declines down to 48.00.

EURUSD holds flat near yearly lows

EURUSD 1309

The EURUSD currency pair was seen trading flat near the recent lows. This came as price action turned volatile on Thursday. The European Central Bank announced a rate cut and also relaunched its QE program which initially sent the common currency lower.

However, by Thursday’s close, the common currency managed to recover to close on a bullish note. We expect the flat range to be maintained in the near term. The EURUSD is likely to test the resistance area of 1.1129 – 1.1111 region in the near term. Unless price breaks out above this level, we expect the currency pair to remain near the current lows.

In the short term, the EURUSD currency pair could be seen back to trading within the range. Support is formed near 1.0950 level. But with price being rejected strongly at this level, we anticipate a move back into the range.

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