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Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 30/10/19

Gold seeks to find direction


The precious metal continues its flat trading albeit near the highs. Price action has been consolidating into a triangle pattern. The upside was capped after a brief attempt to break past the 1522.78 level failed with prices being rejected.

The current flat trading could however be breached later today. The FOMC meeting is due where expectations are high for a rate cut. While the markets have heavily discounted this, the Fed’s forward guidance will be key. This will also shape the direction for gold prices in the near term.

But with gold failing to breakout higher, there is an increasing chance that prices could breakdown. The lower support area 1440 will be tested in the near term. The overall long term trend is due for a correction. Therefore, watch for some volatility after the Fed meeting. But if the bias turns out to be right, gold could be in for some long pending correction.

Crude oil tests the trend line

WTI 3010

Oil prices were seen inching higher and eventually managed to briefly flirt with the falling trend line from below. With prices being rejected, resulting in a bearish candlestick pattern near the trend line, we could see some declines on the horizon.

The Stochastics oscillator is also pointing to a hidden bearish divergence. This would confirm the downside bias in oil. Oil prices have been weaker amid reports from various agencies that there is an oversupply. This week’s crude oil inventory report could bring some short term direction for the oil markets.

From a technical perspective, Oil prices are likely to slip to the 50 handle. However, this support level hasn’t been tested and been elusive so far. Unless oil breaks past the 57.00 region, we expect prices to push lower or at the very least remain in a sideways range.

EURUSD struggles at support area


The euro currency was seen struggling near the support area after it slipped past this level last week. The currency pair is currently testing the support zone of 1.1111 – 1.1129 region. A strong breakout above this level is needed.

To the upside, a convincing breakout higher will confirm the EURUSD’s move toward the next main resistance area of 1.1224 – 1.1200 region. A retest of this level will temporarily keep a lid on further gains. The uptrend could be seen emerging only on a close above this level.

To the downside, the EURUSD will be likely testing the lower support area of 1.0958. Establishing support at this level will potentially confirm an end to the downside. We then expect the currency pair to start looking to make further gains.

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