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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 20/02/19

Gold maintains strong bullish momentum

Gold 2002

Gold prices were seen starting the week on a bullish mode, especially after price broke past the 1320 handle with significant ease. The bullish session has seen prices currently testing highs of 1337. We expect this momentum to be painted going forth. With the breakout of 1320 resistance, gold prices are now poised to test the 1360 handle at the very least.

The gains come as gold prices validate the bullish flag pattern on the daily chart. The target level of 1360 sits near a major resistance level which will be tested in the near term. There is a good chance that gold prices were reverse course if the target is reached.

To the downside, any dips are likely to stall near the 1320 level. Establishing support here will confirm the upside but could also weaken the momentum. At the same time, the current gains in gold prices show a bearish divergence on the Stochastics. This could be a major risk. A reversal before reaching the 1360 level could push gold prices below the 1320 level.

WTI Crude oil prices at risk of a reversal

WTI 2002

Crude oil prices have managed to maintain the gains after clearing the 54 level of support. Price action has managed to breakout past the bearish Ichimoku cloud which could signal a change of trend. However, we anticipate that oil prices will post a correction ahead of further gains to the bullish momentum.

The lower support is clearly seen at the 54 handle where support could now be established. This will potentially signal a reversal off the 54 handle as support is formed giving way to further gains. In the event of a decline below the 54 handle, oil prices could extend the correction down to the 50 level of round number support.

If oil prices slip further then the bullish momentum could be invalidated and oil prices could potentially resume the bearish trend. This is also validated by the hidden bearish divergence seen on the charts.

EURUSD remains range bound but bottom is likely forming

EURUSD 2002

The common currency has remained a bit volatile near the lows of 1.1282 - 1.1312 levels. However, price action has seen consecutive bullish momentum over the past few sessions. This is expected to push the common currency higher in the near term. The next main resistance level is seen coming in at 1.1450.

In the short term, there is a minor resistance level formed at 1.1340. This could mean that the common currency could slip lower and potentially retest the breakout level of 1.1312. Establishing support at this level could trigger an upside momentum in the price action.

Upon a successful breakout from 1.1340, the EURUSD currency pair could be seen extending the gains further and eventually targeting the 1.1450 level. For the near term, we expect that the euro currency has formed a bottom.

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