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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 29/03/19

Gold capitulates, posting strong losses

Gold 2903

Gold prices were seen trading strongly lower on Thursday and the declines fall in view of our bias that we have maintained over the past few weeks. Gold prices were down by over one percent on Thursday. The declines came amid a broader strength in the USD and general risk appetite.

At the time of writing, gold prices were seen testing the support level of 1290. The initial test to this level saw gold prices attempting to post a reversal. We expect this bounce to remain for a short period of time before the bearish trend resumes. A break down below 1290 will open the way for gold prices to extend the declines down to the 1250 level.

A retest of the 1250 level is required as it would complete testing the support level and will potentially see price action preparing for a move to the upside in the longer term horizon.

Oil prices drop after failing to clear the resistance

WTI 2903

Crude oil prices have been bearish on Thursday as price action posted declines after days failing to clear the overhead resistance at the $60 handle. The declines in WTI crude oil prices come as we anticipate a move to the downside for a correction to the uptrend. However, oil prices are still not out of the woods. Considering the recent volatility, we could expect prices to recover the declines as well.

From a technical stand point, oil prices are trading in the cloud which could offer some sort of support to the declines. Watch the trend line which has been breached which could indicate the move to the downside as a result. We maintain the view that oil prices will be testing the lower support at $55 as a result.

In the near term, any bounces, which do not lead to a higher high could signal a retracement ahead of the move toward the $55 handle.

Euro tests the major support

WTI 2903

The euro currency was no exception to the declines from Thursday as the currency pair was seen trading lower. The declines pushed the EURUSD to briefly test the major support area near 1.1280. The support area extends down to 1.1200 level which could be tested if the current declines continue.

A retest of the 1.1200 level could potentially indicate a move back to the March 11thlows. As long as prices remain within the 1.1280 – 1.1200 level, we expect the declines to hold. The medium term horizon for the EURUSD dictates that price action will remain subdued within the levels of 1.1400 resistance and 1.1200 support.

A reversal off the current lows could however mark the start of a move to the upside, but it is still too early to tell. There is also a risk that the euro currency could post a decline from the support area which could accelerate further declines in the currency pair. Therefore, it is best to remain on the sidelines for the moment.

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