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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 20/05/20

Gold prices pullback from an eight-year high

XAUUSD 2005

The precious metal earlier this week rallied to an eight week high on an intraday basis on Monday. However, price action pulled back promptly after this surge. The gains came after a brief spell of market risk sentiment falling. However, as equities bounced back, the precious metal saw lower bids pushing prices lower.

The overall trend in XAUUSD remains to the upside. Right now, gold is testing the previous held upper range at 1729.90. For the moment, it seems like support is forming at this level. As long as prices close bullish above this level, we could expect to see further gains in store.

In the short term, however, there is a risk for gold price to fail at the 1729.90 level. In such a case, then we expect prices to slip lower. The next downside target is at 1683.40. This level marks the retest of the lower end of the range and price could once again settle into the range.

Crude oil prices rally as demand returns

WTI 2005

Oil prices are back on the bullish streak after a few sessions of prolonged consolidation. The gains were driven by businesses opening and economies coming back from lockdowns. The slow but steady rise in factory activity along with demand for auto fuels are some of the things responsible for the surge in oil prices.

At the time of writing, oil prices are seeing some consolidation. This comes as the Stochastics oscillator points to a possible hidden divergence. If WTI crude oil prices fail to post further gains, then we expect a pullback in the near term. This means that the price level of 28.00 will be once again tested for support.

As long as this support holds, there is scope for crude oil prices to continue to rise. However, if the support a t28.00 fails, then WTI crude oil will likely move into a correction. This will open the way for a decline toward the 20.00 level where the previous price level could be tested for support.

Euro rises on talks of new EU fund

EURUSD 2005

The euro currency is rising steadily boosted by demand for a weaker dollar and some developments in the region. Germany and France are in talks to launch a broader EU recovery deal. According to the terms, an additional loan of 500 billion euros are targeted toward assisting countries in the Eurozone.

The euro has been rising for the past three consecutive sessions. However, price action is still not out of the woods. The continued gains will see the EURUSD rising back to test the previous resistance level at 1.1000. Unless there is a breakout above this level, the EURUSD could remain range bound.

To the downside, the lower support level at 1.0784 will stall the declines in prices. But given the fact that this support level has been tested many times, there is scope for this support to weaken. This could open the EURUSD to further declines in the near if prices move lower.

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