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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 18/10/19

Gold prices remain range bound

Gold 1810

The precious metal continues to trade flat below the 1497 handle. Price action has been subdued as investors wait for more clues on the U.S. and China trade talks. Lack of new information has kept the markets somewhat subdued.

Technically, gold is seen trading below the support level of 1497 that was breached. Price action hasn’t quite retested this level to confirm the shift to resistance. Therefore, there is scope that gold prices could breakout higher above 1497. Still, the overall direction remains flat.

The long term view of a decline to the 1440 level of support remains still in place. But gold prices need to breakout lower convincingly to confirm this view. Similarly, to the upside, if prices continue higher, they need to break the previously established highs. Failure to do so could keep gold prices trading flat in the upcoming sessions.

Crude oil maintains consolidation

WTI 1810

Oil prices haven’t moved much. Price action remains confined to the bearish flat pattern that has been formed. A breakout to the downside looks more likely. However, this could change in the event that oil price spike higher.

The weekly crude oil inventory report showed another weekly increase in commercial stockpiles. Oil prices however managed to ignore the data and closed on Thursday with some modest gains. This comes amid hopes that oil prices could push higher toward the 56.00 handle.

For the moment, we expect oil to breakdown towards the 50 handle. Unless the move to the downside is strong, prices could remain somewhat weak. The further the consolidation in the bearish flag pattern, the lower the chances of a downside breakout.

EURUSD testing resistance

EURUSD 1810

The common currency maintained its bullish streak against the US dollar. The gains saw the EURUSD trading in the resistance area of 1.1129 – 1.1111 level. A strong close above this level will confirm further upside in the currency pair.

To the downside, the EURUSD could be seen falling back to the 1.0958 region. The potential for an inverse head and shoulders pattern still remains. But this could be invalidated if prices continue to move higher.

The overall price action in the EURUSD signals that the downside might be over for the moment. Unless the lower support of 1.0958 breaks, we expect the trend to be to the upside. With economic data from the U.S. and the Eurozone currently quiet, the currency pair could remain trading somewhat flat.

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