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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 28/08/19

Gold maintains upside momentum

Gold 2808

The precious metal was seen resuming the bullish trend this week. The gains came despite some initial market nervousness. Gold prices however look to be forming a top. This is evident from the Stochastics oscillator posting a higher low.

The bearish divergence on the daily chart indicates that a correction is likely in the near term. However, in the near term, the support level of 1534 will be crucial. A breakdown below this level will confirm the move to the downside.

The support level at 1440 will be critical as this could stall the declines to the downside. There is also the inside bar forming on the daily chart time frame. Thus, a close below Monday’s low will initially validate the correction lower.

Crude oil maintains a flat trend

WTI 2808

WTI Crude oil prices were seen attempting to recover off the recent lows near the 54 handle. This comes amid the overall outlook remains uncertain. The weakness in oil prices comes as investors remain clouded on a possible decline in the global economy. This could potentially hit demand for oil.

From a technical perspective, the near term upside will stall at the 56.50 level. With resistance level forming here, a breakout is unlikely. Thus, oil prices could remain range bound within the 56.50 level and 52.00 handle.

Due to the fact that oil prices haven’t tested the lower support firmly, we could expect the bias to turn weaker. Today’s weekly inventory report will likely act as a catalyst. A breakdown below the 52.00 handle will however signal further declines in the near term.

EURUSD remains subdued near the lows


The euro currency continues to remain weak following a brief attempt to breakout above the resistance level of 1.1129 – 1.111. Price turned weak following the gains to 1.1150 region. With the resistance level failing to act as support, the euro currency is seen extending declines lower.

However, the downside looks to be done for the moment. There is a good chance that the common currency could be looking to post a rebound anytime soon. But this upside bias is valid only as long as the EURUSD does not breach the previously established lows near 1.1050 level.

We expect this range to continue into the early week of September, in the run to the next ECB meeting. The ECB is expected to announce its QE program and possibly cut rates as well. Thus, the EURUSD could remain range bound until then.

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