Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 22/02/19

Gold loses edge as it reverses gains

Gold prices fell sharply on Wednesday and Thursday after failing to capitalise on the gains from the previous consecutive daily sessions. Price action retreated after testing highs of 1346.61 briefly. Despite the declines, the upside bias remains intact. We could expect the retracement to eventually push gold prices to retest the breached resistance level of 1320 where support is likely to be established.

If gold prices post a successful rebound off the 1320 level, we could expect to see prices attempting to target the 1360 level which marks the measured move off the daily chart’s bullish flag pattern.

However, within the expected decline to 1320, gold prices could also post a reversal and resume the upside momentum. This is left to be seen on whether the precious metal would be able to sustain the bullish momentum which looks to be lost for the moment.

The Ichimoku cloud remains strongly bullish and we could expect price test the cloud in the near term.

WTI Crude oil paints the momentum

Oil prices remained consolidating near the highs as price was seen inching closer to the 57.00 handle. On the daily chart this marks price action moving within a broadening wedge pattern.

Over the past week, oil prices have maintained the gains near the 57 handle but failed to post any fresh highs. Looking to the Stochastics oscillator, we also see that there is a strong bearish divergence that is forming. As a result, oil prices could be seen posting a correction to at least the 56 level in the near term followed by a move toward the 55 level where support could be established.

In the near term, any rebound in oil prices are likely to stall near the 57 handle which could see prices likely to consolidate and as a result form a strong resistance at this level.

EURUSD pares gains as momentum eases

The euro currency was seen trading bearish on Thursday, a day after the FOMC meeting minutes were released. From a technical stand point, the reversal is likely to see the EURUSD currency pair retesting the support area of 1.1312 and 1.1282.

However, as long as this support holds, there is scope for the euro currency to maintain the bullish bias.

On the lower timeframe charts, the EURUSD is seen forming minor resistance at 1.1360. Despite repeated tests, price action has failed to close above this level. As a result, as retest back to the 1.1312 level could see support being tested once again.

If there is a rebound off this level, we could expect to see further gains as long as 1.1360 level is breached. The next main target for the EURUSD is seen at 1.1450.