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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 24/04/19

Gold extends declines but finds support at trend line

Gold 2404

Gold prices continued to extend declines on Tuesday in what seemed like the resumption of the downtrend. Price action is seen seeking support off the major long term rising trend line. This raises the prospects of a potential rebound.

The recently breached support level of 1285 remains the likely target that could see a retracement. A retest of this level will see a potential reversal with resistance to be formed. Failure to hold the correction could see further gains in gold prices that could push gold towards the 1290 region.

The longer term support at 1250 remains the key level to the downside. The retracement to the 1285 – 1290 region therefore remains a key level that could bring in new sellers into the markets.

Crude oil attempts to break resistance

WTI 2404

WTI Crude oil prices posted strong gains at the start of the week. The gains came as the U.S. administration announced an end to the waiver of the sanctions on Iran. This led oil prices higher on the day amid thin trading.

Currently, oil prices are seen attempting to break the resistance area of 66 – 65. It is unlikely to see further gains in the near term. Lack of any short term support could see a potential downside risk to prices. There is also a build up of bearish divergence which points to a potential downside in oil prices.

The initial support at the 57.50 is the likely downside target. Therefore, there is a possibility that oil prices could post a reversal within the resistance area.

EURUSD tests 1.120 lows

EURUSD 2404

The common currency was seen extending declines on Tuesday as prices briefly fell to lows of 1.1200 region during the day before pulling back. With price action trading at the support area of 1.1224 – 1.1200 region, we expect to see a rebound in the euro currency in the short term.

There is a risk of a downside breakout from the support level. This will potentially open further downside in the EURUSD currency pair. The downside target is seen at the 1.1500 level which remains the next target.

The overall trend in the EURUSD remains flat at the moment, but that could change if the support area is breached. Alternately, to the upside, if the EURUSD manages to rebound, then we expect the sideways range to be maintained.

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