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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 16/08/19

Gold fails to capitalize on market sentiment

Gold 1608

The recent market sentiment saw investors rushing to safe haven assets. However, gold prices failed to make any new breakthroughs. The previously established highs near 1530 remain untested yet. This has resulted in gold merely bouncing to form a lower high at 1518.

Failure to post higher highs could potentially confirm that the top has been formed. But for this to be confirmed, gold will need to break past the 1495 level where minor support is formed. As long as this support holds, we could expect gold at risk of moving higher or drifting sideways.

A breakdown below the 1495 support could however signal an impending correction. A breakdown below this support will trigger a move to the 1447 level. This level is pending a retest of support after it previously served as resistance.

Crude oil slips as inventories rise

WTI 1608

Oil prices were seen trading weaker the past two days. This came as the weekly Crude oil inventory report showed a larger than expected build up in the inventory stockpiles. Data from the Energy Information Administration showed a 1.6 million build up in the inventory. This was on top of the 2.4 million build up the week before.

The higher than expected build up in inventory sent oil prices lower. Crude oil was also hit by the current market turmoil about the inverted yield curve. Fears of a recession dampened the demand outlook for oil prices.

Technically, WTI crude oil remains back within the range of 57.50 and 54.00. As long as the sideways range is maintained, we could expect to see oil prices drifting. A breakout from this level is needed to set some direction in the oil markets.

EURUSD extends declines but within range

EURUSD 1608

The euro currency was seen trading weaker. Price action, led by a stronger greenback helped to push the euro lower. Economic data from the Eurozone such as weak GDP figures and Germany's second quarter GDP contracted added to the downside pressure in the euro currency.

In the short term, with the support level being breached, there is scope for the EURUSD to dip further and possibly test the previous lows near 1.1055. However, a breakdown below this level is required to confirm the downside.

The EURUSD currency pair has been trading rather flat over the most part this year. Therefore, we could expect this trend to continue if the previously established lows are not breached.

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