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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 20/12/18

Gold turns volatile, but bias shifting to the upside

Gold 201218

Gold prices edged higher amid some volatily over the week. The price of the precious metal initially fell ahead of the Fed meeting and price action remained subdued. However, gold took a U-turn as earlier today, prices started to rise sharply on the day.

The price action in gold remains risky at the current levels with the pending retest near the 1228.00 still yet to be tested. With the Stochastics oscillator on the 4-hour chart showing a potential bearish divergence that could form, it is best to remain on the sidelines in the short term.

In the event that gold prices manage to establish firm support at 1248, it could potentially validate the upside in prices. The next main target in gold is seen coming in at the 1280.00 handle.

Crude oil continues to weaken

WTI 201218

Oil prices were seen maintaining the bearish trend on Thursday. Price action briefly rebounded after hitting the $46.00 handle before retesting this level once again. The decline in oil prices comes ahead of a holilday week. News reports also suggested that OPEC was looking to publish the production cuts in order to bid oil price higher. However, given the downside breakout in oil prices from a technical perspective, we expect the bearish momentum to be maintained.

The next main target to the downside comes in at $42.50 handle. To the upside, any near term bounce will see the resistance at the $50.00 coming in to hold any gains. Meanwhile, watch for oil prices to test the $42.50 handle which could offer some short term support for the moment. We expect the trend to change only if oil prices are able to successful break past the $50.00 followed by the Ichimoku cloud.

EURUSD stays volatile but testing resistance

EURUSD 201218

Price action in the EURUSD remains stuck in the range with price action seen struggling to break past the resistance near 1.1450. Price action was volatile heading into the Fed meeting yesterday.

The euro initially declined only to erase those gains. Overall, price action is starting to look even more volatile as the markets head into a holiday week. This could bring a lot of illiquidity into the markets and could see the euro currency making some erratic moves. 

We expect gains to come only if the euro currency manages to breakout to the upside. A close above 1.1450 will require a retest of this level where support needs to be established. To the downside, the lower range 1.1200 still remains a key level of interest.

The sideways range in the euro is visually seen with the Ichimoku cloud seen practically flat over the past few sessions.

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