ADVERTISEMENT



Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 24/01/20

Gold trades bullish but price action stays flat

XAUUSD 2401

The precious metal continues to remain perched close to the seven year high that formed few weeks ago. Without any major events impacting the flows, the precious metal remains rather flat near the highs. Despite some weakness in the equity markets, gold failed to make any solid ground.

Given that prices remain trading flat, we expect this to continue into next week’s Fed meeting, which might provide further cues for traders. For the moment, the bias is mixed as there is scope for a breakout in either direction. To the upside, gold must break the previously established highs to maintain the rally.

Failure to do so could see the downside risks building up. A breakdown below the 1557 region could signal a move to the 1497 level followed by a steeper decline to 1440. However, this can only happen based on strong fundamental bias being built up.

Crude oil prices slip despite a modest inventory drawdown

WTI 2401

Oil prices ignored the modest build up in inventory, slipping lower on the day. The weekly crude oil inventory report showed that U.S. commercial stockpiles rose 0.4 million. This was slightly above the forecasts of a 0.1 million decline in inventory.

For the moment, oil prices are testing the support area near the 56 – 55 region. This support level previously held in late December. If prices can rebound off this level, then we expect a bit of an upside bounce. Oil prices are likely to retest the level near 58.00.

There is a strong chance that resistance level will form near 58.00 keeping price action trading rather flat in the near term. For the moment, if the bearish momentum continues, then oil prices could slip to the next lower support at 52.00.

Euro slips on dovish ECB

EURUSD 2401

The euro currency is trading weaker. The declines were set off by the ECB’s monetary policy meeting. The governing council left interest rates unchanged at its meeting on Thursday. However, the central bank undertook a strategic review of its monetary policy. During the press conference, the ECB Chief, Lagarde cited that downside risks for the Eurozone still persisted.

This set off a decline in the euro which has now clearly failed at the resistance level of 1.1111. The current declines could push the euro down to 1.1000 region. Given that this is a psychological level, we expect the declines to stall.

To the upside, a rebound off the 1.1000 region could see the euro trading flat. Further declines below 1.1000 level will see a move to the 1.0958 level eventually.

Read 613 times

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

Newsletter Subscription Form

You are more than welcome to subscribe to our Newsletter and be among the first who get to hear about regular updates on forex and other related news, brokers' updates, websites' changes and more!
I agree with the Terms and conditions and the Privacy policy
Thank you!