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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 22/04/20

Gold prices begin short term correction

XAUUSD 2204

Gold prices are trading lower over the past few sessions after prices touched above the 1740 handle early last week. Prices are somewhat bearish after this move higher. With the global markets still dealing with uncertainty but with a lot of stimulus help from central banks, gold price action is somewhat muted.

For the moment, with prices falling below the 1708.50 level, the bearish bias is in place. In the near term, if gold prices fail to drop down to the support area of 1643 level, we expect a modest move back higher. This will mean that the previous level of 1708.50 could be tested for resistance.

As long as prices do not move higher, we anticipate that gold prices will resume the decline down to the 1643 level of support. Alternately, watch gold prices as there is a possibility of a bullish flag pattern that could also be emerging.

WTI Crude oil prices recover from a historic crash

WTI 2204

Never before in the history have crude oil prices crashed to zero and lower. This happened on Monday after WTI crude oil production outstripped demand to an extent that there were no more storages available. This led to oil prices falling to zero before briefly turning negative.

However, prices recovered rather quickly and bounced back higher. But having said that, oil markets are highly volatile at the moment. From the zero level, crude oil bounced back to 13.00 marking a strong recovery but not before prices started slipping again.

For the moment, given that the 20.00 level was failed to be breached, we expect that resistance level is forming here. To the downside we could expect some continuation lower, but the declines below zero seem to be done for the moment.

EURUSD struggles to find direction

EURUSD 2204

The euro currency continues to trade flat for nearly the third consecutive session. This comes as overall price action in the EURUSD remains flat. Prices are caught within the range of 1.1000 and 1.0784. A breakout from this range is needed for some kind of trend to emerge.

Currently, the euro is muted thanks to the dollar strength. The declines in oil prices also contributed to a stronger dollar. However, this sideways range could potentially indicate that a strong breakout could emerge.

The bias remains mixed at the moment as there is scope for both an upside and a downside breakout. To the downside, the previous lows near 1.0700 will be tested, while to the upside, a breakout above 1.1000 will see a possible move to 1.1141.

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