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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 17/05/19

Gold tests the 1285 support

Gold 1705

Gold prices gave up the gains made earlier this week. Price slipped back to the 1285 handle on Thursday. This marks a retest of the 1285 level as support which previously served as resistance. As long as this support holds, gold prices could maintain the upside momentum.

In the event that price action slips below the 1285 handle, we expect gold prices to potentially test the major trend line. Given the fact that this trend line served as a dynamic support previously, there is a possibility for price action to rebound.

In the unlikely event of a rebound, then gold prices could possibly extend the declines down to the 1250 handle. This will potentially see gold prices reversing course and falling back to the original downtrend. However, a lot depends on how price reacts to the 1285 handle for the moment.

Crude oil prices regain the 63 handle

WTI 1705

Oil prices posted strong gains on Thursday, extending the gains for the previous three consecutive days. This saw prices reversing from lows of 60.80. A continuation to the upside could possibly push oil prices higher as it could now test the 66 – 65 resistance area.

In the near term, we could expect to see some consolidation taking place. Given the fact that the Stochastics oscillator has been rebounding from the oversold levels, the upside bias gains momentum. In the event that we see a reversal near the 63 handle, then oil prices could potentially be facing further losses.

To the downside, the target of 57.50 remains key. This would depend if crude oil could potentially post a reversal candlestick pattern near the 63.00 handle.

Euro continues to extend declines

EURUSD 1705

The common currency was seen trading weaker on Thursday as prices continued the decline. This came after a brief pause to the declines on Wednesday leading to the doji candlestick pattern.

Given the fact that the reversal occurred near the support/resistance area of 1.1200 and 1.1224 region, there is scope for the downside momentum to continue. The next initial downside target is seen at the 1.1150 level. If this level is breached, then the EURUSD could potentially be looking at further declines in the near term.

Watch for any potential rebound near the lows of 1.1150 region which could offer some clues to the upside bias. The support/resistance area will need to be breached in order to see any scope for an upside move.

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