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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 22/01/19

Gold breaks to the downside

GOLD 220119

Following weeks of consolidation and staying above the 1280 handle, gold prices finally broke the range to the downside.

This validates the initial view of the correction to the downside as we look for gold prices to eventually retest the pending support at the 1250 handle. In the near term, gold prices could seen a retest of the 1290 region which would mark a correction to the downside breakout from the triangle pattern.

As long as price does not breakout above 1290, we expect gold prices to eventually test lower breaking past the 1280 handle. A clean break below this level is required for gold to eventually pave way for a retest of the 1250 - 1240 level which previously served as resistance.

This bearish view changes bias in the event that gold prices manage to breakout above the 1290 handle. Posting higher highs above this level could potentially put the price action to trade sideways.

Oil establishes resistance at 54

WTI 220119

Crude oil prices posted strong gains breaking out to the upside. Price action tested the 54 handle where resistance has been established. This led to a sharp decline off the 54 handle and WTI crude oil prices are currently testing the 52 level which marks the upside breakout from the triangle pattern.

We expect some short term support to hold the declines at the current level as WTI crude oil could consolidate between the 54 and 52 levels for a short period of time. The downside correction could eventually send oil prices lower to test the 50 handle.

Given that this is a round number support, WTI crude oil could be seen holding the gains above this level. An eventual break down below the 50 level could however send oil prices lower to test the 46.80 - 46.00 level where support is most likely to be established.

Euro finds support at the trend line

EURUSD 220119

The euro currency's strong declines were stalled after price action hit the dynamic support from the rising trend line. This trend line marks the ascending triangle pattern which the EURUSD failed to capitalize on.
Following the decline below the 1.1450 level, the retest of this level could still keep the ascending triangle pattern valid, but on the weaker side.

The price channel plotted on the 4-hour chart indicats that the euro could potentially post a breakout. This would put the correction to the upside near 1.1380 initially. A successful breakout above this level will see the euro currency retest the 1.1450 level for resistance.

To the downside, if the trend line fails to hold the declines, then the euro currency could be seen extending towards the 1.1200 level eventually.

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