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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 18/09/20

Gold trades soft after Fed meeting

XAUUSD 1709

The precious metal was trading mixed following the FOMC meeting that concluded on Wednesday. With the Federal Reserve holding rates steady and pledging to keep interest rates at zero until 2023, the markets were somewhat disappointed. The earlier expectation was for the Fed to come out with a more dovish message.

Gold prices have been trading mixed for a while and price action is stuck near the 1950 handle. The current consolidation saw prices falling on Thursday only to pullback to this level. The overall trend in the short term remains to the downside. However, we are yet to see a strong decline.

This means that in the near term, gold prices will remain caught above the 1900 level. Only a strong break down below the 1900 level will trigger further declines down to the 1850 handle. Meanwhile, the descending triangle pattern puts the bias to the downside.

Oil prices pare losses amid storms in the Gulf of Mexico

WTI 1709

Crude oil prices are paring losses after falling to a three-month low. Price action has been steadily rising over the past few sessions. This has pushed oil prices back to the 42.00 level, although the commodity is trading a few points below this level. The 200-day and 50-day moving averages are currently acting as resistance.

As a result, we do not expect to see prices pushing any further. A strong breakout above 42.00 is required to confirm the upside. But this is unlikely to happen anytime soon. This could mean that oil prices might establish a new sideways range in the near term.

To the downside, the previous swing lows at 37.00 will remain critical. Only a strong break down below the 37.00 level will confirm further downside. If prices pullback to this level then watch for a potential break down that could eventually see oil prices down to the 30.00 handle.

EURUSD brushes off Fed meeting losses

EURUSD 1709

A day after the Fed meeting, the euro currency is brushing aside the declines. Price action fell to lows of 1.1737 on Thursday but only to pullback higher on the day. This could potentially mean that the euro strength continues to remain strong while the U.S. dollar is giving up the modest gains made on the back of the Fed meeting.

For the moment, the 1.1800 handle is back on the cards. This gives an upside bias to the EURUSD currency pair. A continuation to the upside could see the common currency potentially testing the 1.1900 handle next. But given that the 1.1900 level has proven hard to break so far, we expect to see more consolidation.

To the downside, only a strong close below the 1.1800 handle could confirm further declines. Still, prices will need to break down below the current lows of 1.1737 to confirm the downside. Failure to do so could keep the common currency stuck between the 1.1900 and 1.1800 levels for the near term.

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