Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 21/08/20

Gold slips as it fails to rise above $2000


The precious metal posted strong losses on late Wednesday right after the FOMC meeting minutes. The statement from the Fed came with caution that more stimulus might be needed. However, the precious metal erased the gains made during the day.

The reversal in gold comes near the 2000 level, which marks a psychological level. The reversal indicates resistance at the 2000 level and price action is likely to head lower. The lower support is seen at the 1900 level which managed to hold up when gold prices tested this level just last week.

For the moment, the range is established between 2000 and 1900. A breakout from either of these levels is required to establish further direction in the near term. Below 1900, the next big level of support is 1850 and a close below this level could see gold prices posting further losses.

Oil falls as OPEC meeting concludes

WTI 2108

Crude oil prices are down nearly 2% on the day on Thursday. This comes following the OPEC meeting that was held including Russia. There were no production cuts announced at this month's meeting. But members issued caution that the prolonged crisis due to the pandemic might hit demand for oil prices.

The bearish statements sent oil plunging lower on the day. Price action is trading back at the 42.00 level. Although in the long term outlook, crude oil is still trading flat. We expect the consolidation to continue. Any declines will be likely met by support from the 200-day moving average.

The upside is starting to look weaker even more. If crude oil fails the 41.00 level of support and the impending support near the 50-day moving average, then we might get to see prices correcting toward the 37.50 level which hasn't been tested properly so far.

Euro erases gains but upside still persists


The euro currency erased gains since Wednesday right after prices touched a new two-year high. This comes as the Federal Reserve released the meeting minutes on Wednesday. The US dollar strengthened which pushed the euro back from above the 1.1900 levels.

The strong declines has sent the euro to trade near the 1.1800 region. If this minor support holds, we could see some further gains in the near term. With the euro momentum being bullish, further gains cannot be ruled out. But the gains will come only if the EURUSD manages to clear the 1.1900 level strongly.

As long as the EURUSD trades below 1.1900 level, the risks to the downside rises. The soft support is seen at the 1.1700 level for the moment. But if the euro loses this level, then we could see a correction down to the 1.1600 handle next.

Read 56 times