Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 29/05/20

Gold prices rebound on US and China tensions


The precious metal is recovering following two consecutive session losses. The gains come amid dispute between China and the United States. China recently implemented news laws over Hong Kong, falling foul of its US counterparts. Investors remain wary, and this is seen with the safe haven gold prices rising steadily as a result.

Prices are not out of the woods yet as gold will need to break past the immediate technical resistance at 1729.90. Only a strong breakout above this level will confirm further upside in the precious metal. And further more, gold prices need to close above the previous highs to confirm any further gains in the trend.

Alternately, if price fails to break past the 1729.89 level of resistance, then we expect a pullback. This could result in a reversal that will see gold prices pushing lower. The downside target is at 1683.40 which marked the lower end of the range previously. For the moment, the declines are likely to stall here, but a breakdown lower could see prices posting a stronger correction.

WTI Crude oil attempts to pare losses

WTI 2905

Crude oil prices are trading over 2% in an attempt to pare losses from the previous session. Price action remains rather flat as investors try to ascertain the market sentiment. For the moment, oil prices are bullish various economies are beginning to reopen. However, this could change as US inventories are now once again starting to pile up on stockpiles.

Technically, oil prices are bullish as long as they are trading above the 28.00 handle. This gives the upside bias in crude oil toward the 42.00 handle. But for the moment, oil prices need to breakout above the recent highs of 35.00. A strong close above this level will validate the bias for further gains.

To the downside, the retest of 28.00 could be possible. But if prices do not fall below this level then we expect to see a breakdown even lower. Below the 28.00 level of support, the next downside target is seen at 20.00. Given that this level hasn’t been tested so far, it makes for a potential target to the downside.

EURUSD gains bullish momentum on EU stimulus


The euro currency is posting strong gains as prices were trading above 1.1000 level on Thursday. The gains were driven by fundamental news. The European Union announced a special stimulus package of 826 billion euros. This is expected to help some of the Eurozone economies struggling due to the pandemic led shutdown.

The price level of 1.1000 has proven hard to break on several attempts. Despite some of the past attempts helping the EURUSD to rise above 1.1000, prices were quickly pushed back lower. Therefore, investors might be a bit wary this time around as the potential for prices to fall back remain a possibility.

In the near term if 1.1000 turns to a solid support, then the bias will dramatically shift to the upside. The next main target will be 1.1147 level where resistance will most likely form. This could very well become the next sideways range that the EURUSD could settle into.

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