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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 25/09/19

Gold prices extend gains to the upside

Gold 2509

The precious metal was seen extending gains for four consecutive sessions. This has pushed the precious metal off the lows near 1497. However, traders will be watching to see if the current bullish momentum can be sustained.

A lower high formation in gold on the daily chart will potentially indicate a move lower. Gold prices are due for a correction to the 1440 level initially. Therefore, a lot will depend on whether the precious metal will be able to break past the recently established highs.

In the near term, if the recent highs are not breached, the precious metal is likely to consolidate into a range above the 1522 level of support. A breakdown below this support will however confirm the longer term move lower to the 1440 level.

Crude oil prices extend declines

WTI 2509

WTI Crude oil prices continued to extend the declines lower. This came after a few sessions where price action turned flat. With the Saudi Arabian oil pipelines due to head back to full production, oil prices continue to remain weak.

From a technical perspective, oil prices are on track to retest the minor support area of 56.00. If this support level holds, the symmetrical triangle pattern will still hold sway. The bias would be to the upside for a more firm retest of the resistance area near the 60.50 level.

Alternately, if the 56.00 level of support breaks, then we expect oil prices to continue to trade within the medium term range. The lower support area of 50.00 will once again come into the picture. Due to the mixed fundamentals for the moment, oil prices continue to remain in a consolidation phase.

EURUSD lifts higher on weaker USD

EURUSD 2509

The common currency was seen posting some modest gains on Tuesday. This came largely due to a weaker U.S. dollar. The USD declined initially in the day after the conference board’s consumer confidence fell sharply by over nine points.

This was later followed by the weak reading from the Richmond Fed manufacturing index. Overnight, the potential threat of an impeachment of President Trump also added to the woes as the risk on sentiment picked up.

Technically, the gains in the EURUSD remain limited. The currency pair will likely maintain its sideways range. The near term resistance level of 1.1111 is due for a retest. If the current bullish momentum persists, we expect the EURUSD to test this level before reversing gains.

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