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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 15/01/20

Gold loses its shine as declines set in

XAUUSD 1501

The precious metal is clearly losing the upside momentum. Price action continues to remain to the downside, right after the precious metal hit a seven year high last week. The declines could potentially be either a consolidation or a continuation to the downside. Investors are waiting for further global cues in terms of the trade talks to seek direction.

Technically, the decline in gold prices could see a test of the initial support at 1543. However, there is scope for prices to retest the breached support level of 1557. If resistance is established here, then we expect the move to the downside.

In the unlikely event that gold prices breakout past the 1557 level, we then expect further gains coming up. However, gold will need to break past the previous highs near 1600, to confirm further bullish momentum.

Oil prices pullback as the trend line is being tested

WTI 1501

Crude oil prices have been in a steady decline following the initial surge on the U.S. and Iran conflict. However, since the easing of tensions, oil prices pared gains. This week, the weekly inventory report will be the major catalyst for the oil markets in the near term.

The current retest of the trend line comes in as the bias remains mixed. If prices are able to rebound off the dynamic support from the trend line, we expect some near term gains. The immediate resistance level near 60.64 will be tested once again.

Unless oil prices break past this level, we do not expect to see further gains in store. There is a strong chance the trend line will fail as support on a second test at the levels. The downside support is seen at the 56.00 level if prices decline.

Euro consolidates near resistance

EURUSD 1501

The euro currency has been trading flat over the past few days. This is leading into a consolidation taking place near the resistance area of 1.1130 – 1.1111 levels. In the process, price action is also morphing into a bearish flag pattern.

The breakdown to the downside off the bearish flag will instantly see the major rising trend line being tested. As long as this can hold as dynamic support, the EURUSD’s declines can be halted. But in the event of a breakdown of the trend line we expect further declines to set in.

The next main lower support is at 1.0958. This level is pending a retest of support, thus raising the odds of a decline to this level. Economic data is quite sparse this week, with only the U.S. retail sales report due over the course of the week. We could expect to see some movement, but the overall flat trading in the EURUSD is set to continue.

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