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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 22/07/20

Gold advances to a fresh nine-year high

XAUUSD 2207

The precious metal has resumed its bullish rally with prices breaking out from the consolidation from past sessions. The gains come amid concerns that the global economy will be flooded with more stimulus in order to stoke inflation. The rise in the precious metals come despite the equity markets making a strong rally.

The next key level of interest for gold prices is the 1850 handle. We expect prices to consolidate around this level. Further gains can be expected only if the precious metal makes a strong close above the 1850 handle.

In the event that price fail to breakout above 1850, then we expect to see a move lower. The 1800 level is now the minor support. If prices break down below this handle, then the next price target is around the 1750 handle.

Oil prices attempt to breakout off the 200-day MA

WTI 2207

WTI crude oil prices are somewhat bullish, rising over 3.5% intraday on Tuesday. Price action has been struggling near this level over the past few sessions. The gains in the oil markets come on the back of a weaker US dollar and also the possibility of renewed demand for crude oil.

From a technical stand point, if oil prices make a daily close above the 42.00 handle, we could expect to see prices continuing higher. The next key target level is at the 50.00 handle. In the near term, price action will have to establish support near the 42.00 level.

As long as the support level holds, then we expect a move higher. Alternately, oil prices might be at risk of a pullback if it fails to breaks out above the 42.00 level. Price action is at risk of a deeper pullback to the 38.00 level where the next key support level resides.

Euro rises to a new four-month high

EURUSD 2207

The euro currency is posting strong gains for the third consecutive session after prices broke out past the 1.1400 handle. The gains in the common currency came following news of the EU summit deal. EU leaders agreed to a new fiscal stimulus which is expected to bring the EU integration closer. A weaker USD is also partly responsible for the gains in the euro.

After prices cleared the 1.1400 handle, we now expect the gains to push the common currency toward the 1.1500 handle. In the near term, we expect a dip back to the 1.1400 handle to establish support. If the common currency establishes support at this level, then the gains might be confirmed.

However, in the event that the 1.1400 handle gives away, then the EURUSD will be at risk of a correction lower. Below the 1.1400 handle, the next lower support is seen at the 1.1200 level. Price action will however be supported with the 50-day moving average.

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