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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 18/09/19

Gold moves to a holding pattern ahead of Fed meeting

Gold 1809

The precious metal was posting modest gains on Tuesday. However, the price action remains rather muted with XAUUSD trading within the range. We anticipate that this sideways range will continue in the run up to today’s Fed meeting.

The bias is to the upside as we anticipate that gold prices will post a lower high. Given that the next resistance level is seen at 1522, gold prices could move to the resistance level. As long as this resistance holds, the longer-term bias is to the downside.

Gold prices are due for posting a correction lower. Following the lower high near 1522, gold will be looking to correct lower to the 1440 handle. Establishing support here will mark a correction to the longer-term trends. We also expect that the bias will remain to the upside following this correction.

Oil prices retreat following the surge

WTI 1809

Crude oil prices surged at the open on Monday. The gains came following the drone attacks on some Saudi oil fields. Oil prices gained amid concerns of supply disruptions and a possible escalation of tensions in the Middle East.

However, by Tuesday, oil prices retreated lower. Saudi Arabia said that the oil fields would be operational sooner than expected. This led to a modest decline in crude oil prices. But the declines remain small compared to the gains.

Crude oil prices hit the resistance level of 63.00 rather briefly on Monday before retracing the declines. This marks the minimum upside target following the symmetrical triangle pattern. The current declines could once again move back into a range. The lower support is seen at the 58.00 handle.

EURUSD maintains its consolidation

EURUSD 1809

The currency pair continued to trade flat near the two-year lows. The ECB led gains saw prices retracing them rather quickly. However, the consolidation which happens near the lower trend line could mean that there could be a breakout soon.

To the upside, the resistance level at 1.1129 – 1.1111 remains critical for further gains. Unless we see a strong breakout above this level, the EURUSD currency pair could maintain the sideways trend for much longer.

To the downside, unless price action closes below the previous lows of 1.0950, we do not expect to see further declines. As a result, the currency pair could maintain the range within 1.1111 and 1.0950 region in the near term.

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