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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 21/02/20

Gold maintains bullish streak at a six-year high

XAUUSD 2102

The precious metal is showing no signs of letting go as price action surges to post new six-year highs. The gains reflect the current market sentiment in the market, which is rather mixed. Investors remain concerned on a number of issues globally. The Coronavirus outbreak is expected to impact the global economy, as per the latest warnings from the IMF.

From a technical stand point, we expect the precious metal to continue to drift higher. However, there is a strong chance that price action will reverse in the near term. The lower support area at 1580 will need to be tested for support to keep the gains consistent.

As a result, keep an eye out on the Stochastics oscillator which is already signaling divergence. However, price action needs to confirm this in order to trigger the downside. For the moment however, gold remains a buy on the dips. The next likely upside target will be the 1650 handle.

Crude oil confirms the bullish breakout

WTI 2102

Crude oil prices are rising steady on the back of a modest inventory report. Data from the U.S. Energy Information Administration showed that for the week ending February 14th, crude oil inventory grew by 400,000 barrels. This is on top of the API’s report of a build up of over 4.8 million barrels.

Following the strong breakout above 52.00 handle, price action is on track to test the 55.22 level. However, any near term pullback could see prices retracting these modest gains so far. This means that oil prices could slip back to the 52.00 handle.

If support is forming here, then we expect the gains to potentially continue toward the 55.22 level. For the moment, there are signs of hidden bearish divergence on the Stochastics that also validates the expectation of a decline back to the 52.00 support area.

EURUSD might be showing signs of a reversal

EURUSD 2102

After posting a steady decline, the EURUSD currency pair is in the early stages of a bottoming pattern taking shape. However, it is a bit too early to speculate at this point. For now, the support area near 1.0790 remains critical for the currency pair.

In the event that the EURUSD falls below this level, then we expect the continuation to push through lower. The Stochastics oscillator remains strong in the oversold level. This could mean that there is scope for the bearish momentum to continue.

To the upside, the correction will see price action rising toward the 1.0958 region. This will be the most likely resistance level that will be stalling the currency pair from making further gains.

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