Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 14/10/20

Gold prices reverse near trend line


The precious metal is posting declines for the second consecutive day. The reversal comes after last Friday, the precious metal posted strong gains. However, by Monday, price action hit the trend line followed by Tuesday's declines. The markets continue to remain a bit frothy across the board amid a number of developing narratives.

For the moment, if gold prices continue lower, then we could see the 1850 level being tested once again. This will potentially confirm the descending triangle pattern that is forming. A break down below the 1850 level will potentially accelerate the declines. It also gives the minimum downside toward the 1750 handle.

Alternately, the upside remains somewhat weak for the moment. But if we see a rebound off the 1850 handle, then gold prices could push higher. This will see the trend line coming under pressure once again. But only a strong breakout above the trend line is required for gold prices to push further up.

Crude oil prices pullback after strong declines

WTI 1410

Oil prices are trading mixed with Tuesday's price action reversing some of the declines from last Friday and Monday. The reversal comes following short term fundamentals. Earlier, the reason behind the drop in oil prices was the end to the oil strike in Norway. Libya also lifted an embargo on one of its biggest oil fields, adding to a rise in supply.

Overall, oil prices remain in limbo as price action continues to remain trading flat. This is also seen with the 200-day and the 50-day moving average trading quite flat since mid-July this year. Unless oil prices break the range, the sideways price action will continue.

In the short term, the stochastics oscillator is near the overbought area. This could mean that there is a risk for price action to push back lower. The upside gains are also limited as price will need to contend with the 200-day moving average and the 42.00 level of horizontal resistance.

EURUSD erases gains as price hits a two session low


The common currency is trading weaker on Tuesday, boosted by a stronger US dollar. As a result, price action gave back the gains made from last Friday. However, the current declines coincide with the 50-day moving average. This could offer some short term support to the currency pair.

In the event that that the EURUSD loses the 50-day moving average support, then we could expect a drop to the 1.1600 level. It is quite likely for this level to act as support considering that it was tested firmly earlier on. The short term support will keep the euro gains capped near the 50-day moving average.

In the unlikely event that the euro loses the 1.1600 level, then we could expect further declines. This will potentially see the EURUSD testing the 1.1375 area. Here, we can see a confluence between the 200-day moving average and the horizontal support area as well.

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