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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 14/08/19

Gold eases off six-year highs

Gold 1408

The precious metal managed to initially rise to new highs of 1534.89 before turning bearish on the day. Price action was a bit volatile as the day’s range on Tuesday managed to engulf the previous three trading sessions. The volatility came about after the U.S. was seen easing back on the trade war with China.

The current rally in gold prices is due to see a correction in the near term. The minor support near the 1495 handle will be closely watched. A confirmed close below this level could indicate the start of a move lower.

The lower support is found at the 1440 handle. Establishing support at this level which previously served as resistance will possibly confirm the correction. Note that this support level also marks the 38.2% Fibonacci retracement level, adding weight to this bias.

Crude oil extends gains as U.S. and China tensions ease

WTI 1408

WTI Crude oil prices continued to maintain a winning streak for the fourth consecutive day. The gains were strong after the U.S. eased back on tariff restrictions on Chinese made goods. The Washington administration was seen scaling back on the number of goods that would have been impacted by the new tariffs that are due to come into effect from next month.

The rebound in crude oil prices saw prices breaking past the 56.00 level. This level previously served as support, which was breached, leading to a decline in oil prices. However, the rebound managed to break past this level as it failed to come in as resistance. Price action will need to form a higher low to confirm the upside.

If the bullish momentum continues, crude oil could be seen rising to the 60.64 handle, if not higher.

Euro eases as USD regains strength

EURUSD 1408

The euro currency was seen easing back on Tuesday. This came after the U.S. dollar managed to close in the green. The U.S. economic data was also positive. Inflation report showed a 0.3% increase on the headline and the core CPI, which was bullish for the USD.

Despite the fall in the euro, the currency pair remains trading flat. The resistance area near 1.12243 – 1.1200 is proving hard for the currency pair to breakout higher. This could see a move lower to the support area of 1.1129 – 1.1110 region. A move within this range could lead to a potentially powerful breakout in the medium term.

The bias remains mixed at the moment, with the decline in the common currency. However, we anticipate that the bottom has already formed in the EURUSD. Unless price posts fresh lows, we expect the sideways range to continue.

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