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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 13/11/19

Gold continues bearish trend

XAUUSD 1211

The precious metal is on track to post four consecutive days of declines. This comes as the economic sentiment continues to improve, pushing risk assets higher. As a result, gold, which was once in favor recently has been posting declines. However, this comes as XAUUSD inches closer to the support area of 1440.

Question is whether gold will continue its declines to test the 1440 handle firmly. Currently, the price action indicates that traders are rejecting prices near the current lows. If there is a reversal at this level, the gold could be in for a rebound. The rebound could see prices testing the 1473 handle at the very least.

However, we expect that the gains will be limited to the 1473 level of resistance. If there is a breakout above this level then gold could be essentially looking to recover and test the previous highs. To the downside, watch the 1440 handle. A breakdown below this level will signal declines down to 1346 handle at the very least.

Crude oil prices could be forming a head and shoulders pattern

WTI 1211

The current consolidation in crude oil prices is pointing to a possible head and shoulders pattern forming. The daily chart shows that prices are currently consolidating near the right shoulder. If we see a decline off this level it would confirm the view.

The fundamentals for oil prices remain mixed. While the U.S. and China trade wars remain one of the major stories, the OPEC production cuts is another aspect. Latest news report indicate that OPEC members will be leaving production levels unchanged at the current limit. However, a formal decision will be taken at the December OPEC meeting.

Technically, the neckline support area at 52.00 will be critical. If price action drops to this level and lower, then we expect oil prices to potentially fall to 42.00 at the very least. This narrative however remains mixed. If the current momentum pushes oil prices higher, the H&S pattern will be invalidated.

EURUSD extends declines

EURUSD 1211

The common currency is seen extending declines further although price action indicates that the momentum is currently stalling. The EURUSD is on track to slip to the lower support area at 1.0958. Establishing support at this level will be critical to price action going forward.

The declines come as the USD comes back into favor. The currency has been on a five day winning streak before posting some declines earlier on Monday. But price action looks to have recovered from the slump at the moment.

In the near term, we expect the EURUSD to remain range bound within 1.1111 – 1.0958 region. But the euro currency will need to test the lower support before further direction to the trend can be set.

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