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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 26/08/20

Gold prices slip for the third consecutive day

XAUUSD 2608

The precious metal is posting steady declines with three consecutive days of declines. The weakness in the precious metal comes following a modest risk on sentiment in the market. This comes as both U.S. and China announced that they were resuming the trade talks. Earlier in the week, the market sentiment was hit on rumors that the trade talks had failed.

From a technical perspective, gold prices are on track to test the 1900 level. This would be the first test of a major support level. If the weakness continues, then gold prices could extend losses even further. The next main support is seen at the 1850 handle.

In the unlikely event that gold prices catch a bid around the 1900 level, then we need to see prices rising above the 1960 handle where there is a minor resistance level. Above 1960, the next key level of interest is the 2000 which has proven to be a resistance level already.

WTI crude oil rises on supply concerns

WTI 2608

Crude oil prices are trading somewhat bullish on Tuesday. The gains come as oil prices touched a five-month high. The gains were primarily driven by the storms off the Gulf of Mexico which has shut down quite a few pipelines. The supply glut alongside the OPEC+ supply guts is pushing prices higher.

The current gains still do not put oil prices clear of the recent range. Following a brief test to the 43.00 handle, oil prices have pulled back from the highs. However, we expect that the 42.00 level will now become the new support area of interest.

This could mean that oil prices might enter into a new sideways range. However, if the 42.00 level is lost, then we could see oil prices slipping back into the old range. The US dollar strength is also important for the oil markets. For the moment, the US dollar is somewhat weaker and this could add to the bullish bias for crude oil.

EURUSD holds steady after a two-day decline

EURUSD 2608

The euro currency is posting some modest gains on Tuesday following two days of consecutive declines. The EURUSD is so far forming an inside bar since Monday. This potentially suggests that we could see a strong breakout in the near term. Price action is holding steady near the 1.1810 level for the moment.

The modest gains come as the US dollar is trading somewhat weaker. This comes ahead of Fed Powell's speech due this week at the Jackson Hole symposium. Investors are bracing to hear the central bank head speak which could shed light on the course of the US monetary policy.

For now, the bias in the EURUSD is mixed. A close above 1.1900 will shift the bias to the upside. This will also open the way for the EURUSD to rise to 1.2000. To the downside, a close below 1.1751 could signal a move toward the 1.1600 handle where support is long pending a retest.

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