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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 28/02/20

Gold retracing losses and maintains a bullish position

XAUUSD 2802

The precious metal is slowly scaling back from the losses as price action is nearing the 1660 level initially. Price previously hit a fresh seven year high. The gains reflect the current market panic because of the virus outbreak.

While equity markets pulled back Thursday, gold is maintaining a more quiet stance. This could possibly suggest that the gains in gold might be overdone. However, we cannot rule out anything as the bullish momentum remains strong. A breakout above 1660 handle will see a move to the 1680 region once again.

A firm close near the 1680 handle could confirm the upside being completed. Alternately, if price continues to consolidate at the current levels, then watch for break out below the 1640 level. This will signal a possible move to the downside.

Crude oil plunges another 4%

WTI 2802

WTI crude oil prices are taking a bearish turn with prices falling sharply. At the time of writing, WTI crude oil is testing the $46.50 handle. This comes after a failed attempt at a rally which saw prices reversing direction falling short of testing the resistance level.

WTI crude oil then broke past the initial support of 52.00 and also failed at the trend line. This accelerated the declines even more, pushing it to current lows. The declines in Crude oil comes even as the weekly crude oil inventory report was bullish.

Data from the U.S. Energy Information Administration reported a build up in inventory for the week ending February 17th. However, price action was bearish, ignoring the modest build up. Furthermore, with OPEC not reaching a consensus on cutting oil production, the commodity has been favoring the bears.

EURUSD maintains a bullish front

EURUSD 2802

The EURUSD currency pair is holding on to strong gains. Price action has been somewhat steady for the past four sessions. This came after the EURUSD fell to lows of 1.0800. Given the current momentum, there is scope for new bulls to be attracted into the market.

As price is currently testing the resistance level of 1.0958, it will be interesting to watch how prices react. A strong close above this level is needed to confirm further upside. However, given the fact that the Stochastics oscillator is forming a hidden bearish divergence, there is scope of a pullback.

A reversal near the 1.0958 resistance will signal a move downward. Thus, we could expect the EURUSD to maintain a steady sideways range within the 1.0958 and 1.0800 levels in the near term.

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