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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 15/09/20

Gold holds steady to the upside ahead of Fed meeting


Gold prices have managed to post some modest gains this week, in the run up to the FOMC meeting due on Wednesday. The upside bias comes in after gold prices wavered over the past couple of days. Price action remains flat at the moment but near the top of the rally. A lot will depend on how investors react to the Fed meeting and the subsequent reaction in the gold markets.

For the moment, the 1900 level is offering strong support. Any declines to this area could see price action bouncing back to the upside. This comes as the 50-day moving average is also trading close to the horizontal support level. A strong catalyst would be required for gold prices to break lower.

To the upside, the trend line is likely to hold prices from rising further. But a breakout of the trend line could potentially see gold rising to retest the 2000 level of resistance. As long as gold prices remain below the 2000 handle, the bias is to the downside in the long term.

WTI Crude oil settles into a range

WTI 1609

Oil prices have been trading rather flat over the past few sessions. This temporary period of low volatility comes after oil prices crashed through the 42.00 handle few weeks ago. On Tuesday, the U.S. Energy Information Administration (EIA) painted a bleak picture of further deteriorating demand for oil.

However, oil prices did not react much. For the moment, we expect the sideways pattern to hold. To the upside, the 42.00 level will come back as resistance. The confluence of the 50 day and 200 day moving averages add strength to this bias.

This keeps the downside pressure on crude oil. The main support is seen at the 30.00 level. However, above this level, the 35.00 handle might hold up in the short term. But a decline down to the 30.00 handle could possibly put a lid on oil prices slipping further.

EURUSD logs steady but modest gains


The euro currency has been on a tear so far. Prices have been rising at a steady pace for the past five daily sessions. This comes as the U.S. dollar has weakened since late Friday last week, after the U.S. nonfarm payrolls report. Investors are concerned that the Fed might come out dovish, leading to a weaker greenback.

This in turn has pushed the euro higher. Prices are yet to breach the 1.1900 handle, where a resistance level already holds. A strong breakout above 1.1900 is required for the common currency to post further gains. Still, the next big challenge will be the 1.2000 handle which has been tested just once.

To the downside, the EURUSD could retest the 1.1800 level. If this level breaks, then 1.1700 remains the next level. But considering that this is a minor support level, we could see price action pushing lower too. The main support area is 1.1600. But for this to happen, a lot will depend on the outcome of the Fed meeting this week.

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