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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 26/06/20

Gold prices hold steady above 1730

XAUUSD 2606

The precious metal has been making some modest gains over the past two days. Overall, gold prices are looking somewhat bullish after breaking out above the 1730 handle. The gains in the precious metal comes on the back of a weakening risk appetite which has weakened the equity prices in the near term. At the current rate, gold prices are potentially targeting the 1800 level.

For now, gold prices are likely to post a correction. The evolving price action dictates a possible move back to the breakout area near the 1730 level. This means that gold will potentially test this level for support once again. If support is formed at 1730, then we expect the next upside target to hit 1800.

The scope of gold breaking down below 1730 is also quite low. Given the current bullish trend in the precious metal, any dips are likely to attract new buyers into the market. To the upside, the 1755 level seems to be forming into a resistance, therefore a breakout above this level could be likely on a retest of 1730.

Crude oil attempts to recover after a two day decline

WTI 2606

WTI crude oil prices fell for two consecutive days right after price action managed to breakout above the 40.00 level. The declines came amid renewed threat of trade wars with China. This in turn dented the sentiment in the markets as new trade wars could potentially weaken prospectus of demand for crude oil. However, oil prices remain a bit mixed for the moment.

Right now, oil prices are caught within the levels of 42.00 and 28.00. We expect oil prices to consolidate within these levels for the considerable period of time. This could mean that oil prices might be taking a pause amid the longer term uptrend building up.

In the event that oil prices fall below the 28.00 handle, then it would be a cause for concern as this could open up the downside in the price action. But considering the recent gains made by the oil markets, we expect that the 28.00 level of support will hold up as it attracts new buyers into the market.

Euro slips on ECB meeting minutes

EURUSD 2606

The European Central Bank released the meeting minutes on Thursday from the previous monetary policy meeting. The minutes showed widespread disagreement on the scope and size of the ECB’s stimulus program. The euro fell, building up on the previous declines as this new information indicates that the ECB’s stimulus program does not have widespread support as initially thought.

The euro currency is down for two consecutive days so far erasing the two day gains made since Monday. Price action remains a bit mixed at the moment as the overall bias remains to the upside. But at the same time, the recent gains in the euro have increased the odds of a correction.

For now, the support level near 1.1147 remains critical for price action. The declines, if they continue could fall to this level where support might hold up prices in the near term. However, if we see a reversal above this level once again, then we anticipate a shift in the direction to the upside.

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