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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 17/07/20

Gold prices likely to turn bearish


The precious metal failed to make any major gains after initially posting a new nine-year high around the 1817.79 level last week. Price action has been somewhat mixed and trading in a range. Following Wednesday's doji close, gold prices are trading bearish. This could potentially extend declines further.

For now, the 1800 level will play a key role as support. If gold prices lose this level, then we expect to see a deeper correction in the making. Below the 1800 level, the next key support area is at the 1750 handle.

To the upside, a rebound above or near the 1800 level could keep price action biased to the upside. Yet, unless gold makes a breakout above the 1817.79 highs, we could expect a sideways range or a potential close lower for the precious metal.

Crude oil prices face stiff resistance near the 200-day MA

WTI 1707

Oil prices have not made any major gains this week. This comes despite the OPEC meeting that concluded earlier in the week. OPEC nations along with Russia agreed to cut production, effective from August. However, with the production cuts in line with the market expectations, oil prices were muted.

The commodity managed to close in the green on Wednesday but following this, price action has failed to rise any further. The 200 day moving average is proving hard to breakout from at this point. It could mean that oil prices might be at risk of a move lower.

If WTI crude oil closes below the 40.00 handle on a daily basis, then we expect a correction down to the 38.00 handle. Alternately, if price action manages to close above the 200-day MA, then there is scope for a rise above the 42.00 handle opening the way toward the key 50.00 level.

Euro trades flat after ECB keeps policy steady


The euro currency is likely to close flat on Thursday after the ECB meeting. The European Central Bank held its monetary policy meeting and decided to keep interest rates unchanged. Although the tone of the central bank was dovish, the euro managed to rise to intraday highs of 1.1441 before pulling back.

For the moment, the common currency is settled above the 1.1400 handle. But there is always a scope for prices to pullback lower. Therefore, a daily close below the 1.1400 handle could mean that the euro currency might be in for further declines. This would push the currency pair back into a sideways range.

To the upside, price action will need to establish support near the 1.1374 level. This would potentially make the case for the euro currency to aim for the 1.1500 target next. However, the gains won’t be straight forward as we expect some choppy price action to persist.

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