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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 28/06/19

Gold corrects off six-year highs

Gold 2806

The precious metal was seen posting declines for two consecutive days. Price fell off the six-year high from $1439 to test intraday lows of $1398.40 on Thursday. Investors remain on the sidelines for now as the strong rally in gold will see if the gains can be sustained further.

From a technical outlook, if gold prices fail to breakout higher, we could expect to see some consolidation taking place. However, the support is seen at 1360 which could be tested in case there is a sharper than expected correction.

The bias in gold remains mixed at the moment. But there is scope for the precious metal to touch highs of 1450 if the momentum gains support once again. There are some key fundamentals that will be influencing gold prices in the near term.

This week’s G20 summit which will see the U.S. and China making another attempt to strike a deal will be closely watched. As a result, investors are likely to remain on the sidelines in gold for the moment.

Crude oil edges closer to $60 a barrel

WTI 2806

Oil prices got a boost this week largely due to a surprise drawdown in U.S. crude oil inventories. Initially, it was the report from the American petroleum institute, later followed by the official EIA report.

The U.S. crude oil stockpiles fell more than expected, leading to a surge in the oil prices. WTI Crude oil edges closer to the $60 handle. This comes as the OPEC meeting is due next week. OPEC leaders and Russia will be meeting in Vienna, Austria on July 1stand 2nd.

The question is whether OPEC will continue with its production cuts that could lead to lower oil prices. However, in anticipation, prices have already discounted the news which could see oil hovering near the $60 handle into the OPEC meeting next week.

EURUSD stays subdued, but close to $1.1400 handle

EURUSD 2806

The euro currency was seen giving up the 1.1400 handle quite easily but the correction remains soft for the moment. Price action is looking somewhat supported near the 1.1350 level. As long as this minor support holds, we expect the common currency to hover near the 1.1400 handle.

In the event that the 1.1350 support gives way, we expect the EURUSD to continue its sideways range. The lower support is seen at 1.1300 next followed by the familiar support at 1.1224 – 1.1200 region.

Most of the flows in the EURUSD could however be determined by the U.S. dollar index which has recently shown signs of a rebound after posting strong losses last week.

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