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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 19/08/20

Gold prices struggling near 2000

XAUUSD 1908

The precious metal has resumed its bullish rally after falling sharply last week. However, the steady pace of gains are showing signs of exhaustion as the precious metal is seen struggling near the 2000 handle. The precious metal has seen one of the strongest rallies this year and prices touched new all-time highs just a few weeks ago.

Traders will be looking to the FOMC meeting minutes that will be released on Wednesday. Investors will be closely watching the report for any clues on the direction of the Fed monetary policy. The US dollar is already trading quite weak as concerns about inflation and economy remain a top agenda for traders.

In the near term, watch how price action unfolds near the 2000 level. If gold prices make a reversal at this level, then we expect prices to push lower. The previous support area near the 1900 level will be critical. A breakdown below 1900 will potentially signal a move lower to the 1850 handle.

WTI Crude oil trades flat

WTI 1908

Oil prices continue to drift aimlessly with price action most likely paring gains from Monday. The declines come as oil prices hold steady above the 42.00 handle. The commodity has failed to make any big moves and has settled within the 42 - 41 range since mid-July.

The OPEC+ meeting is due on Wednesday. While investors do not expect OPEC to make any big supply cuts at this week's meeting, a surprise announcement could move oil markets higher. Above the 42.00 level, the next big target is the round number level near 50.

To the downside, price action is well supported with the 50-day moving average also turning somewhat flat, alongside the 200-day moving average. The lower support comes off the 50-day moving average which is trading around 40.00

Euro rises to a new two-year high

EURUSD 1908

The common currency managed to break past the resistance level formed near 1.1900 level. Price action is trading around 1.1930 region with further gains likely to come by. A strong daily close above the 1.1900 handle will potentially confirm further upside in prices.

The gains in the EURUSD come mostly on the back of a weaker US dollar. Therefore, the EURUSD rally is potentially at risk in case the US dollar manages to post a reversal. This could lead to a possible strong correction in the currency pair. We already see the bearish divergence forming on the Stochastics.

For now, the key level of interest is the 1.1900 level. If the EURUSD closes back below this level, then we might get to see prices pushing lower. The next key target area is the 1.1700 level that was briefly tested last week. We expect the declines could stall here in the short term.

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