ADVERTISEMENT



Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 16/10/20

Gold prices trade flat near 1900

XAUUSD 1610

The precious metal also saw a sideways range with price action attempting to post gains for the second consecutive day. But the pace of gains remains rather muted for the moment. This also coincides with the 50-day moving average which is acting as a potential resistance level.

Given the current set up, gold prices may continue to trade a bit range bound. Price action for the past two days is confined to the bearish candlestick from Tuesday this week. A breakout from this range will potentially set the direction in the near term range.

The bias remains mixed for the moment as a result. There is a potential for gold to invalidate the descending triangle pattern. This will confirm the possible move to the upside. To the downside, gold prices need to push below the 1850 handle. A break down below this support will confirm the downside in the precious metal.

Oil prices drop as new lockdown measures threaten demand

WTI 1610

Crude oil prices continue to whipsaw with prices reacting to the new developments globally. Oil prices are down nearly 2% on Thursday as price action gave back some of the gains made just the day before. Earlier, oil prices rose as U.S. inventory levels saw a modest drawdown. Still, in the medium term outlook, oil prices continue to remain flat.

Price action near the 41.00 handle is showing signs of a potential ascending triangle. If this bullish pattern is validated, then we might expect to see a move higher. But this will be subject to price action breaking out above the 42.00 handle. The minimum upside will be towards the 50.00 level.

But given the current global set up, such a bullish move might be impossible. The stochastics on the daily chart is nearing the overbought levels. This, alongside the horizontal resistance from the two moving averages potentially confirms a move back lower.

EURUSD continues to edge down lower

EURUSD 1610

The euro currency is posting declines for the fourth consecutive session. The euro weakness comes as a result of the U.S. dollar strengthening. The greenback has been rising sharply after the stimulus talks are being seemingly delayed. This has pushed the euro down to an 11-day low.

At the current pace, further declines in the euro could see prices drifting back lower again. This will mean that price action will test the support area of the 1.1600 level once again. However, given the current volatility in the FX markets, it is possible for the euro to reverse losses again.

The downside bias will gain prominence only if the 1.1600 level is breached. A close below this key support area will push the euro currency down to the 1.1374 level where the next support area resides.

Read 18 times

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

Newsletter Subscription Form

You are more than welcome to subscribe to our Newsletter and be among the first who get to hear about regular updates on forex and other related news, brokers' updates, websites' changes and more!
I agree with the Terms and conditions and the Privacy policy
Thank you!