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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 15/02/19

Gold prices look poised to breakout to the upside

Gold 1502

Gold remains in a consolidation phase with the daily chart still showing price action stuck within the bullish flag pattern while the four hour chart time frame showing the triangle pattern that has emerged near the top. Yesterday, the precious metal made small gains as it broke the falling trend line. Price action is seen currently testing the breakout level.

If successful, the next target for gold comes at 1320 where resistance is to be tested. A breakout above this resistance is critical for gold to post further gains. This could  potentially send prices higher in the short term. However, given the fact that the resistance at 1320 remains strong and the fact that the upside breakout from the falling trend line has been somewhat weak, we could expect a fake move to the upside.

In the near term, if gold prices don’t post a convincing breakout above 1320 we can expect prices to remain trading flat in the near term. The lower support is seen at 1300.

 

WTI Crude oil invalidates the bearish wedge pattern

WTI 1502

While oil prices initially broke out to the downside, prices fell to lows of 52 before recovering from the lows. This pushed prices higher and crude oil eventually broke past the 56 resistance at the time of writing.

The price action has invalidated the bearish wedge pattern as a result and also puts the bias flat at the moment. Unless there is support formed near the 56 handle we could expect some sideways price action here on. To the upside, the next main target is seen at the 58 level where the next main resistance resides and is waiting for a retest.

To the downside, there is still scope for price action to ease back from 56 level. This would put the focus back to the 52 level which has managed to serve as support in the short term. However, the longer term support is seen at 50 handle which hasn’t been tested and could potentially be tested on a possible correction to the downside.

Euro fails to hold the gains

EURUSD 1502

The common currency was seen easing back after briefly rising above the 1.1312 level of resistance. The declines pushed the euro currency back lower to post fresh lows but price action quickly recovered off the lows only to retrace back lower again.

We expect that price is currently consolidating near the lows and that the bias could be shifting to the upside. The short term high formed at 1.1300 will be key. If price manages to breakout to the upside above 1.1300 then we could expect to see a follow through. This could push the common currency to highs of 1.1450 as the eventual target.

Alternately, if the current weakness continues, then the euro currency could be seen breaking out lower and eventually slip to new lows as a result.

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