ADVERTISEMENT



Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 30/07/20

Gold prices slip on economic woes and profit taking

XAUUSD 3107

The precious metal is trading a tad weaker on Thursday. The modest decline, which is the first nine sessions comes after economic reports from the US and the Eurozone painted a disappointing picture. GDP for the world's largest economy and the Eurozone's largest economy fell deeply and contracting for a second quarter. The declines in gold prices are also explained by the month end and weekend profit taking.

For the moment, a bearish close could mean nothing. Given the strong momentum, gold prices can be at risk of an upside reversal. However, a close below the 1950 level could see the onset of a correction.

Below the 1950 level, the next main support area is at the 1900 region. This level could be easily tested if the current declines continue. But watch for evidence of a lower high forming. This will make the upcoming correction more convincing and could see new short sellers coming into the market.

Crude oil turns lower on rising doubts of demand recovery

WTI 3107

Oil prices have been barely moving in any direction over the past few weeks. However, prices fell to nearly a two-week low on Thursday. Following the weak economic data, questions remain on the spate of recovery in demand for crude oil. Furthermore, the rising risks of a second wave of the pandemic is also a cause for concern.

After weeks of trading in a range, the current downside breakout in oil markets might be the beginning. But watch for the 50-day moving average, currently at the 38.16 level. This could act as dynamic support and keep prices supported.

In terms of the current declines, there is scope for oil prices to drop toward the 36.00 level which marks the previous big support level. However, keep an eye out on the 38.00 level which was briefly tested in early July.

Euro holds steady despite weak German data

EURUSD 3107

The euro currency barely budged after disappointing data from Germany. Official data on GDP released on Thursday showed the German economy contracting at the fastest pace on record. GDP fell 10.1% on a sequential basis, following a 2% decline in the first quarter. This was the biggest drop in the quarterly GDP since record keeping began. The data also beat forecasts of a 9% drop.

For the moment, the euro currency tested highs of 1.1800. Price action could turn flat near these highs. But still, there is no evidence in price action pointing to a correction. Any correction in the EURUSD will see prices testing the 1.1600 level which marks a major support area.

It is therefore ideal to wait for a lower high to form to confirm the downside bias. A close below 1.1600 level could however signal further declines. This will potentially open the way for the euro to post steeper declines down to the 1.1400 handle which is the next support area.

Read 26 times

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

Newsletter Subscription Form

You are more than welcome to subscribe to our Newsletter and be among the first who get to hear about regular updates on forex and other related news, brokers' updates, websites' changes and more!
I agree with the Terms and conditions and the Privacy policy
Thank you!