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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 19/06/19

Gold surges as central bank dovish guidance gains

Gold 1906

Gold prices once again attempted to rally but fell short of last Friday’s rally. The gains in the precious metal came as the latest central bank to take a dovish turn was ECB’s Mario Draghi.

With gold firmly perched above the 1320 handle, we expect the upside bias to prevail in the short term. Gold prices are just a few points away from the 1360 handle where the next main resistance level resides. A retest of this level could however keep the gains in check.

This would potentially leave gold prices to trade within the range of 1360 – 1320 level in the short term. If gold prices fail to break out above the 1360 handle, then we could expect to see the correction pushing gold prices down to the 1300 level in the medium term.

WTI rallies on comments ahead of OPEC meeting

WTI 1906

With the OPEC meeting due next week, oil prices are reacting to comments from various oil ministers participating in the OPEC meeting. Oil prices rebounded strongly on Tuesday after comments from oil minister from Equatorial Guinea.

The minister commented that OPEC was aiming for oil prices to be around the $60 - $70 barrel in an interview on Tuesday. The gains come as oil prices have remained weak amid mixed fundamentals.

Tuesday’s rebound could see oil prices drifting sideways, albeit the support at the 50.00 level remains still a possibility. To the upside, crude oil is seen testing the 54.00 handle. If this level is breached, then oil prices could be pushing higher. The next main target comes in at 57.50.

Euro slips on Draghi’s comments


The euro currency was seen posting strong losses on the day on Tuesday. This came as the EURUSD currency has remained rather fragile. The common currency gave up its gains failing to capitalize after a rebound off the support level.

In his speech, Draghi noted that the ECB would be looking to lowering interest rates as early as July. Draghi and raised the prospects of restarting the ECB’s QE program. This sent the euro to test the lower support at 1.1200 – 1.1224 level.

If this support fails, we expect the EURUSD currency pair to resume the declines and potentially test new lows in the near term. The next main price level of interest will be late May lows of near 1.1100 region.

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