Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 23/10/19

Gold prices consolidating into a triangle

The precious metal has seen somewhat subdued trading over the past few weeks. This comes right after price posted a fresh high, rising above the 1550 handle. Following this strong rally, gold has attempted to post a modest rebound. Failure to post higher gains saw price action marking a lower high.

The current consolidation is seen turning the price action into a consolidating triangle. Therefore, the scope for a breakout is near. The bias remains mixed as a breakout in either direction is inevitable. To the upside, gold will need to breakout above the resistance area of 1496 – 1522. Only a close above this level will confirm further upside.

To the downside, the support area of 1440 remains the main target. We could expect to see price testing this level. It would mark a correction to the long term uptrend. However, a breakout below this level could trigger further declines, which could potentially threaten the uptrend.

WTI crude oil attempting to push higher

Oil prices have been relatively tame. Price action continues to consolidate within the bearish flag pattern, with no clear signs of a breakout just as yet. On Tuesday, oil prices closed in the green.

The gains came on reports that China was raising the oil import quotas. This meant that the world’s second largest economy would be able to import more crude oil to be processed at its local refineries. The news was however a bit muted as represented by the price action in oil prices on Tuesday.

The overall bias in crude oil remains to the downside. Price action could potentially slip from the bearish flag pattern. This will trigger the downside towards the psychological support level of 50.00. A retest of this level has been pending for quite a while.

EURUSD eases after a strong rally

The currency pair was seen retreating after it initially rose to a two-month high. But with the EURUSD clearing the previously formed resistance level of 1.1129 – 1.1111, we expect that price could pull back to test this level for support.

If support is formed at the current levels, then the EURUSD could trade sideways. The upper resistance level is seen at 1.1200 region. Unless there is a breakout from this range, we do not expect to see any strong trends being established.

In the event that the EURUSD breaks out to the downside, then we expect a retest of the lower support at 1.0958. Establishing support here could however keep the upside bias alive. This will put the EURUSD back to testing the 1.1129 – 1.1111 region.