Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 27/03/20

Gold attempts to rebound after closing with a doji

The precious metal is rising over one percent, a day after closing rather flat on Tuesday. Price is nearing the 1640 handle which could turn out to become resistance. If we see a reversal here, then we expect XAUUSD to consolidate within the 1640 and 1590 level.

The gains in gold prices comes largely as a result of the U.S. government announcing a $2 trillion stimulus bill. The gains are seen initially as a knee-jerk reaction to the market news. Therefore, there is a risk that prices could slip back quite easily.

For the moment, the support level at 1590 will be critical. If prices fail at this level we expect a decline down to the 1522 handle where the next support holds.

WTI Crude oil regains declines

Oil prices are back in the slump, losing over 4% on the day. This comes after price action showed a modest rebound in the earlier days leading up to the decline. At this rate, there is a strong chance that oil prices will be testing the support level at 22.00 level once again.

The Stochastics oscillator is currently in the oversold level. However, we expect a retest of this level once again. There is scope for price action to potentially break down from the 22.00 level.

From the technical perspective, price action is currently bearish. This comes following Tuesday’s doji candlestick pattern. Thus a bearish follow through from here could signal a move further down.

Euro rises back to reclaim the 1.1000 handle

The euro currency is back on the front foot amid weakness in the U.S. dollar. The common currency is up over 1.33% at the time of writing. It also marks a gain for the fourth consecutive day. Currently price action is near the 1.1000 level.

If this level proves to be too strong to break, we expect the common currency to once again fall back into the range. The corridor between 1.1000 and 1.0784 level could be the new sideways range in the near term.

For the moment, the price action indicates that a bottom has been formed for the EURUSD. But any further declines will need to see a break down below the previously established lows at 1.06500 region.