Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 27/02/19

Gold prices muted, but supported above 1320

Gold 2702

Gold prices did not make much leeway this week after last Friday’s decline off the highs. Price action has moved into a small range and has been stuck at this level since the start of this week. The muted price action comes despite some key events that have pushed up the market sentiment a bit.

With prices staying firm above 1320 level, the support level hasn’t been tested as much. However, given the close proximity to this support level, there is a good chance that either gold prices will break the support and head lower or bounce off and establish a strong support at the initial test.

The Stochastics oscillator on the daily chart is starting to move upward and price remains quite a bit away from the bullish Ichimoku cloud as well which could act as a secondary line of support. This potentially shows the risk to the downside at 1300 which will no doubt hold prices at the first instance. On the 4-hour chart time frame, gold price is seen testing the Ichimoku cloud. But there are signs that price could be shaping into a bearish flag pattern. This can be validated only on a break down below the 1320 level. For the moment, the bias is flat.

Oil drops like a rock, but declines hold for now

WTI 2702

Oil price was in for a surprise this week. Prices fell off the highs at 57.75 earlier in the week. The big decline pushed WTI crude oil prices slower to close at 55.13 by Monday’s close. The declines in oil prices came as a result of President Trump’s tweet, calling for OPEC to maintain low oil prices.

The decline off the highs still shows a bit of room for prices to extend lower. The main support is seen at the 54 level with the potential to slip even a bit further. However, dynamic support is seen at the lower trend line of the broadening wedge pattern. The Stochastics oscillator on the daily time frame has signalled a sell and price is ripe for a retracement to the Ichimoku cloud.

On the 4-hour chart, if the somewhat bearish flag pattern is validated, then we can expect price to extend lower to the 53.50 handle at the very least. This would mark a decline into the bullish Ichimoku cloud seen on the 4-hour chart.

EURUSD showing signs of bullish momentum building up


The euro currency is seen extending some gains against the U.S. dollar over the past few days. The gains come after the common currency fell to the familiar support area of 1.1312 - 1.1282. Given that this is a rather strong level of support, the EURUSD has managed to bounce off this level.

Price action in the currency pair however remains choppy. This comes amid weak economic reports from the Eurozone and the mixed data from the United States. The rather flat market on the daily timeframe is aptly reflected with he Ichimoku cloud which has turned flat as well while flip-flopping between bullish and bearish clouds.

Switching to the 4-hour chart timeframe, one can clearly see the long wicks over the past few sessions. However, the EURUSD is seen attempting to push higher especially after clearing the bearish Ichimoku cloud. The next main resistance to the upside is at 1.1450 which could be tested if this momentum continues.

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