Gold, WTI Crude oil and EURUSD - Intra week technical outlook, 30/10/20

Gold breaks down lower

The precious metal gave up its sideways range as price capitulated after failing to post any major gains. The declines in the gold prices comes as the U.S. stimulus bill plans have stalled. This has dampened the sentiment in gold. Elsewhere a stronger than forecast third quarter GDP report has helped to keep prices in gold to be subdued.

With the 1900 level of support being lost, gold prices will be looking to the 1850 support level next. Given that prices briefly tested this level previously, it will be interesting to watch of how prices react. A rebound at this support level will see gold rising back to the 1900 level.

This will potentially keep a tight sideways range in gold. Meanwhile, if the 1850 level of support gives way, then we could expect further declines. The support level comes in from the 200-day moving average which near the 1782 level. This forms a minor confluence with the 1750 support area.

Oil price drop to a four-month low

Crude oil prices are bearish once again, however there is a good chance that the trend will quickly reverse back into a range. Price action has been falling steadily for nearly two consecutive sessions so far. The declines come as major European cities are imposing another lockdown. This is seen as a negative for oil prices, keeping demand very subdued.

Price action started the bearish move since last Friday. Following a brief recovery on Tuesday, price action continued to push lower. At the time of writing, oil prices are testing the 36.15 level of support.

If this support level gives way, then we expect further declines in the oil markets. The next key support area is seen only at the 30.00 handle. However, the Stochastics on the daily chart is oversold. This could lead to a short term rebound in oil prices which are trading currently near the support area.

EURUSD nears a one-month low

The common currency was trading weaker on Thursday losing over 0.75% intraday. The declines mark nearly four straight sessions of bearish close. The trend kicked off since the start of the week in anticipation of the ECB meeting on Thursday. As widely expected, the central bank signaled plans for more stimulus at the December meeting.

This has pushed the common currency lower. At the current pace, we expect the EURUSD to test the potential 1.1600 level of support. If support holds at this level, then the common currency could potentially see a rebound. However, gains are likely to be capped near the 1.1800 level to the upside.

In the unlikely event that the EURUSD loses the 1.1600 support level, then we suspect further declines to come. This will push the EURUSD to the 200-day moving average. It will also potentially send the common currency down to the 1.1374 level of support.