Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 25/11/20

Gold slips to 200-day moving average


The precious metal is down for the second consecutive day posting strong losses. The declines come as Oxford and AstraZeneca announced the success of their Covid-19 vaccine. This brings the total count of successful trials to three. In turn, this led to an improving risk appetite in the market, leading to investors shedding the safety of the precious metal.

The current declines to the 200-day moving average signals a test of dynamic support. Therefore, there is a strong likelihood of gold prices rebounding from the moving average. The gains will likely be capped near the 1850 handle.

To the upside, further gains above 1850 can be clearly ruled out. This will mean that the precious metal will stay put above the 1800 level where the moving average level also resides. Only a strong break down below this level will accelerate declines. This would open gold to further losses.

Crude oil surges past $42 a barrel

WTI 2511

Oil prices turned bullish on Tuesday, rising close to 5% on the day. The gains come as a result of improving risk appetite. The announcement of three Covid-19 vaccine is pushing investors to buy the commodity. This is in hopes that global economies including travel will resume soon.

However, it is unlikely that the vaccine will reach the masses this quickly. As a result, we could see some pullback due to profit taking. The next key level of interest comes in at the 55.00 level of resistance.

However, we do not expect oil prices to make a steady rise to this level. Any pullbacks will likely see oil prices falling back to test the 42.00 level where support will most likely form. As long as oil prices are steady above this level, the bias remains to the upside.

EURUSD begins to consolidate


The euro currency is holding on to a tight range taking cues from the U.S. dollar. Following a brief strengthening of the greenback on Monday, the dollar is giving back those gains. This comes due to the risk on sentiment in the market. The U.S. dollar is likely to ease further in the near term.

For the EURUSD, the 1.1900 level remains a key challenge. Price action needs to breakout strongly above this level to confirm further gains. But this is unlikely in the near term. But a close above 1.1900 will open the way for the euro to test the 1.2000 level next.

To the downside, we have already seen the 1.1800 level of supporting holding on for the moment. Therefore, we expect this sideways range to continue in the short term. If the euro breaks below 1.1800 then we expect the room to open for a move lower to the 1.1600 level of support next.

Read 48 times