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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 25/12/20

Gold prices trade subdued amid thin trading


The precious metal is trading rather subdued for the second consecutive day. This comes as trading volumes drop with most of the major trading hubs closed on account of the Christmas bank holiday. The fundamentals in the market are also not that conducive for gold prices which seemed to be trading rather flat as a result.

Price action is continuing to trade within the sideways range of 1900 and 1850. For the moment, it seems like the 50 day moving average is providing dynamic support for gold prices. As evident, price action was seen testing the 50 day moving average over the past three consecutive sessions.

However, failure to post any declines beyond the 50 day moving average has pushed price action to close in the positive for the second consecutive session. We expect the sideways range to continue to hold in the short term. However, watch the stochastics oscillator which is likely to turn bullish. But for this to materialize, gold prices will need to break out from above the 1900 level which proves difficult at this point.

Oil prices rebound after selloff

WTI 2512

WTI crude oil prices are attempting to recover from the losses set off from the previous two sessions earlier in the week. The declines were initially set off following renewed concern of the new coronavirus strain which has once again so an immediate reaction. Most of the major countries have already restricted flights in and out to the United Kingdom where this new strain was initially discovered.

after the two day sell off, oil prices managed to close bullish on Thursday. This came just before the start of the Christmas Holidays. The bullish engulfing pattern could potentially see a continuation to the upside. However, for this to happen, oil prices will have to post new higher highs to confirm the continuation of the uptrend.

The stochastics oscillator also has room to the upside which is indicative of a continuation in the oil markets. Therefore, or break out above the previous highs near 49.20 could potentially open the way for oil prices to finally test the elusive psychological barrier of $50 a barrel. To the downside, price action will need to break out lower from Wednesday's lows of 46.

Euro currency trades flat, unmoved by Brexit deal


The euro currency is trading flat on Thursday despite news about the EU and the UK reaching a last minute Brexit deal. While the British pound has reacted positively to this, the price action in the euro remains flat. The common currency managed to rise to highs off 1.2259 before giving back this intraday gain.

Price action remains caught within the range from Tuesday this week. Or break out from this range will then provide the short term direction to the trend in the EURUSD currency pair. the overall bias in the common currency remains to the upside. However, in the event that Monday’s lows are breached, then we could see a short term decline.

The euro currency is also likely to trade a bit erratic as thin trading volumes make it susceptible to large market orders. Therefore, overall, we expect the EURUSD to remain somewhat range bound between the recently established highs and Monday's lows. To the downside, the 50 day moving average is likely to support any declines which coincides near the round Number support level of 1.2000.

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