Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 30/09/20

Gold prices rebound with support at 1850

The precious metal is posting modest gains on Tuesday and price action is likely to close in the green for two consecutive days. The gains come as the support area near the 1850 level has held up. Following two days of trading flat, gold prices closed with a bullish engulfing pattern on Monday. This is followed through by the continuation to the upside on Tuesday. At the current pace, the gains could see gold testing the 1900 level in the near term, where resistance could form.

It is also quite likely that gold prices might turn to a sideways range caught between the 1900 and the 1850 region. A breakout from this level could potentially set the tone of the next leg of declines. Below 1850, we expect gold prices to possibly test the 1750 region. But for this to occur, price action needs to break down sharply below the support area.

To the upside, the 50-day moving average might cap the gains. Thus, the 1900 region could potentially turn to resistance with the confluence of both the moving average and the horizontal resistance level. Only a strong close above this level could confirm further upside in gold. Still, the precious metal will need to challenge the previous all-time highs near 2000 in order to move further up.

Oil down over 3% intraday on Tuesday

Crude oil prices are heading lower once again amid mounting uncertainty on the future demand prospects. The declines come as the U.S. dollar has once again found favor adding pressure to the commodity to the downside. Meanwhile, with the second wave of the Coronavirus already hitting Europe and air-travel still in limbo, oil markets have been trading rather flat over the past few sessions. The current declines show oil prices easing off the highs near 41.00.

However, it will be left to be seen how far the declines will go about this time. Price action is clearly near the resistance level of the 41 - 42 region. This is further alleviated by the fact that we also have the 50-day and 200-day moving average as well. This is preventing price action from posting further gains. With the Stochastics oscillator also hinting at a move lower, the declines could be sustained.

For the moment, the previous lows near 38.00 is likely to hold. We might expect the support area to form around this region. However, in the event that oil prices break down below this level, we could expect to see further declines. Below 38.00 handle, the next main support level is at the 30.00 level which hasn't been tested ever since price broke past this level in late May.

EURUSD on track for a retracement

The common currency is trading in the green for two consecutive sessions. The gains come after prices briefly moved, a few pips shy of the 1.1600 level of support. If the current momentum continues, we could expect price action to test the 1.1800 level once again. Given that this level previously held up as support, a retest of this level for resistance will confirm the downside.

As long as the euro does not break out above 1.1800, we could expect prices to remain stable within the 1.1800 and 1.1600 level. But the downside bias is likely to build up. This will expose the common currency to further declines if the 1.1600 level of support gives way.

Below 1.1600 support, the next key area of support is found near the 1.1374 region. Here, we see a confluence of the 200-day moving average alongside the horizontal support level. However, watch how the Stochastics oscillator will unfold near the 1.1600 region. If we see the oscillator moving from the overbought levels, it will validate the downside.