Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 26/06/19

Gold rally showing signs of exhaustion

Gold prices continued to push higher on Tuesday. Price briefly rallied to a fresh five year high as price touched highs of 1439 before easing back on the day. The gains now mark a sixth consecutive week of gains.

However, Tuesday’s price action indicates a possible exhaustion to the uptrend. Given the strong surge in price, gold has failed to establish any downside support. As a result, the current stalling of the gains could soon transfer into a correction.

The main support level is seen at the 1360 level. This is later followed by the support at the 1320 level. However, for the correction to occur, gold will need to post a reversal pattern near the current highs. A daily close below the 1400 level will signal the potential downside correction in price.

To the upside, the continued momentum could see gold testing the 1450 handle in the near term.

Crude oil posts modest gains

Oil prices have remained largely flat over the past three days. However, price action has remained somewhat mixed near the highs. WTI Crude oil has been posting three consecutive days of doji patterns near the top end of the rally.

The exhaustion in the short term gains coincides with the hidden bearish divergence that we see on the charts. This could potentially mark a downside correction in the near term. However, price will need to close below 56.72 in order to confirm the downside.

The initial support is seen at the 54.00 level. A retracement to this level will mark a possible move to the upside, unless this support is breached. At the moment, the gains in WTI crude oil remain mixed. The trend is also rather flat at the moment, but the upside bias will gain momentum if support is formed at 54.00 handle.

Euro likely to reverse near support

The common currency has posted strong gains over the past few days, which saw price testing the 1.1400 handle. However, the overall trend remains flat unless the EURUSD manages to breakout above the 1.1400 level of resistance.

In the short term, the downside correction could push the EURUSD back to testing the support level at the 1.1224 – 1.1200 level. This would keep the currency pair to trend sideways for the most part.

Therefore, the EURUSD will continue to maintain its range within 1.1400 and 1.1200 levels. A strong close above 1.1400 is required in order to confirm the upside bias.