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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 27/11/19

Gold snaps a four day losing streak

XAUUSD 2711

The precious metal is attempting to breakout following four consecutive days of declines. The declines arose upon renewed market optimism on the U.S. and China trade deal. While there is still no official word, investors are pinning hopes that both countries will strike the much anticipated Phase One deal before the end of the year.

From a technical standpoint, gold prices remain rather muted. However, there is scope for some upside to build up. This is seen from the Stochastics oscillator which is potentially pointing to a bullish divergence. The upper price point near 1497 is the likely upside target where resistance could be established.

To the downside, if prices fail to breakout above the interim highs at 1472, then we expect a decline to the lower level of 1440. A test of support near 1440 could keep gold prices within the sideways range of the said levels.

Crude oil prices resume rally

WTI 2711

Oil prices were seen rising for the second day on Tuesday. This comes following last Friday’s bearish close. However, the upside could be limited for the momentum until we get to see the weekly crude oil inventory report. There is scope that oil prices will wait for further fundamentals before resuming the uptrend.

The upside target is firmly near the 60.50 level where resistance could be formed. A breakout above this level will still keep prices within check in the range of 63.00 and 60.50 region. Given the strong gains in recent time and the short term uptrend, keep an eye on the minor rising trend line.

The support level is seen at 56.00 based on the bearish divergence on the Stochastics. But further declines could come if price breaks down further below this level. However, the confluence of the major falling trend line and the minor rising trend line could see prices supported for now.

EURUSD could bounce back higher

EURUSD 2711

The common currency remains weak against the USD. Most of the declines come on the back of the major global narratives such as the trade wars. This has led to a modest bullish position build up in the U.S. dollar.

But with lack of any major fundamentals to go by, the EURUSD could remain subdued in the short term. Price action currently indicates a potential bullish divergence forming. This gives way for prices to breakout higher to the resistance level once again.

The price level near 1.1111 could be easily tested if the upside momentum builds up. To the downside, if the declines resume, then the EURUSD will be seen testing the lower support area of 1.0958 level.

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