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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 17/07/19

Gold likely to turn bearish near the top

Gold 1707

Gold prices have practically stalled in their gains. The resistance area of 1420 has failed to be breached. Price action has been repeatedly testing this resistance level but to no avail. If the consolidation near the top continues, then it only confirms the view that we could expect to see a correction in gold quite soon.

However, for the time being, the Stochastics oscillator looks a tad bullish. This could potentially keep the momentum rather flat. However, note that there is also an ascending triangle pattern that is forming near the top. This could potentially trigger an upside breakout.

In such a situation, gold prices could be looking to rise to 1450 at the very least. Thus, the current price action in gold remains rather mixed. Look for how price reacts near the minor support at 1384 to ascertain whether the move will be to the downside.

WTI Crude oil stalls at resistance

WTI 1707

WTI Crude oil prices have stalled near the resistance area of 60.64. This came after price initially formed a doji which was followed by a bearish close. The price action could potenitally signal a move to the downside. At the time of writing, oil prices are attempting to post some gains. But as long as the 60.64 level is not breached, the downside bias could remain.

The support level of 57.50 remains the downside target in crude oil prices for now. We expect this sideways range to be established until a clear trend emerges. The bias remains flat at the moment. Therefore it is best to remain on the sidelines and wait for oil to lead the direction. A breakout above 60.64 will potentially trigger further gains in the near term. This will push oil prices to the next resistance area of 63.

Alternately, if oil prices break down to the 57.50 level we could expect to see a move lower. Given the fact that oil prices did not test the psychological 50 level in the previous decline, this could be an option if the support gives away.

EURUSD back at support


The common currency was seen giving up the gains as the EURUSD was seen testing the previously established support area of 1.1224 - 1.1200 region. However, unless this support area breaks we do not anticipate further declines. The currency pair could remain range bound in the short term. The declines in the EURUSD came following a stronger U.S. dollar. The dollar gained on the back of strong economic data in the retail sales report.

We therefore expect the EURUSD to maintain its range within the 1.1400 resistance level ant 1.1224 - 1.1200 level of support. Unless there is a strong break from either of these levels, we do not anticipate any big gains or declines in the currency pair. There is however a possibility that the EURUSD is forming a head and shoulders pattern. This is evident from the recent lower highs formed, marking the right shoulder.

Thus, if the support area of 1.1224 - 1.1200 breaks, we expect the EURUSD to post further declines, potentially falling to test the 1.1000 levels in the medium term.

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