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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 17/10/19

Gold prices continue to trade flat

Gold 1610

Lack of any clear fundamentals has kept gold prices in check. Although prices fell below the 1497 level of support, gold has been rather flat. But we expect to see some breakout in the near term. With the bias being mixed, there is a chance that gold prices could breakout in either direction.

The overall bias remains to the downside. But lack of bearish momentum puts this under question. Gold prices could be seen testing the support level of 1497. A retest of this level to establish resistance could very well confirm the bearish view. This will keep the lower target of 1440 on track.

But in the event that gold prices breakout above 1497, we expect prices to remain back trading flat. The sideways range between 1522 and 1497 must be breached in order to confirm the upside. Failure to post any new highs could however keep price action subdued.

Oil prices consolidating to a bearish breakout

WTI 1610

Crude oil prices remain rather subdued as the price recovery continues. Following the breakout from the wedge pattern, oil prices managed to bounce off the lows at 52.00. However, the rebound remains somewhat contained for the moment.

The weekly crude oil inventory report will be coming out later today which could be a market mover. Bear in mind that the U.S. crude oil inventory report has seen a significant build up in inventory over the past few weeks. However, rumors that OPEC could cut production keeps the rebound sustained for now.

In the near term, the consolidation has seen oil prices morphing into a bearish flag pattern. A downside breakout off the 52.00 lows could easily push oil prices to test the 50.00 psychological level of support with further declines likely on a breakout below the 50.00 handle.

EURUSD manages to maintain the bullish momentum

EURUSD 1610

The common currency was seen gradually rising higher as price action confirms that a bottom has been formed. The brief retest of 1.0958 and the rebound higher means that the EURUSD is on track to potentially test the next resistance level at 1.1111 – 1.1129.

However, watch for a possible decline on an initial test of this resistance level. It is likely that the EURUSD will fall back lower. The new sideways range could be formed within 1.1111 – 1.1129 to 1.0958.

This also raises the scope of an inverse head and shoulders pattern with the neckline resistance coming in at 1.1111 – 1.1129. A successful formation of the right shoulder will confirm this view. It will also set the EURUSD on track for an explosive move higher. This comes as the currency pair has been subdued for the most part this year.

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