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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 19/06/20

Gold prices remain a rut

XAUUSD 1906

The precious metal is trading flat during another session. This comes as investors remain mixed amid a host of global narratives. Equity markets have also been trading flat reflecting the same sentiment as gold. However, the consolidation in the precious metal continues for a prolonged period of time.

From a technical perspective, gold prices need to break the range. This means a strong breakout above 1730 or below 1683.50. Only this breakout will determine the direction of the next leg of the trend. However, note that there is a possibility of a minor inverse head and shoulders pattern forming.

If we get to see a right shoulder emerging from this pattern, then the bias will shift to the upside. However, a lot will depend on whether gold prices will breakout to the upside or not. For the moment, we expect the consolidation to continue.

Oil prices advance after recent pullback

WTI 1906

WTI Crude oil prices are up around 3%, recovering from the recent pullback. The gains came as OPEC leaders met to review the production cuts that were implemented. Oil prices have been somewhat volatile as price remains sensitive to the economic uncertainty. Latest news included Saudi Aramco which is reportedly cutting jobs after the recent plunge in oil prices.

In the recovery rally, oil prices are attempting to test the $40.00 a barrel price level. Given its key psychological importance, a breakout above this level might lead to strong gains. The next key level is at 42.00, followed be a move to the $50.00. Therefore, it is advisable to wait and watch for further gains.

To the downside, support is seen at the 38,00 level. As long as this level holds, we expect oil prices to push higher. But a breakdown below this level could signal a stronger correction. The downside, we are looking at is the 28.00 level.

Euro continues to fall against the dollar

EURUSD 1906

The euro currency is seen giving up its gains, as widely expected. The declines come after the US dollar is seen strengthening in the markets. A bit of market risk off sentiment is also pushing the price of the dollar higher. Economic data from the Eurozone remains sparse with not much of news, making this more of a technical move.

The current declines in the EURUSD will likely conclude as prices near the 1.1147 level. This is a minor support level which will likely reverse gains if the support holds. However, following a test of this level, expect a lower high to form.

Alternately, if prices slip below this level, then the EURUSD will most likely correct lower to the 1.1000 lev\e. A decline to this level of support will mark the completion of the previous correction underway.

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