Fears of a recession were overdone last week as a sense of normalcy returned. Equity indices managed to post a modest recovery into Friday's close.

However, concerns continue to keep risk appetite in check. From the inverted yield curve to a slowdown in China and Germany, to the crisis in Argentina, investors had plenty of narratives running in the background.

 

Euro Slips to 2-Week Low

The common currency fell to a two-week low on Friday. The declines came amid a broader strength in the USD as well as the trade balance figures. The eurozone's trade surplus stood at 20.6 billion. This came as exports were down 4.7% while imports fell 4.1% during the period. The trade surplus of 20.6 billion was down from 22.6 billion in June 2019.

 

Will EURUSD Decline Further?

The currency pair's decline last week shows price trading just above the lower trend line. This could offer some dynamic support in the near term. However, price action remains weak and there is a possibility for the EURUSD to test the previous lows near 1.1030. The Stochastics oscillator remains in the oversold level, which signals a possible rebound in price in the near term.

EURUSD

 

Crude Oil Trades Mixed Amid Economic Uncertainty

WTI crude oil prices closed with modest gains on Friday. Price action in crude oil remains flat amid the economic outlook turning mixed. However, last week's retail sales report managed to quell fears of a recession. This partly led to gains in oil prices but the commodity failed to capitalize on it. The strength of the USD also dampened the upside bias in oil.

 

WTI Crude Oil to Maintain the Sideways Range

Oil prices are expected to maintain the sideways range. The resistance level is established at 57.50 while the support is found at 51.70. Amid this level, the minor support at 52.00 is seeing a bit of consolidation. Overall, oil prices need to break out from this range to establish some momentum and direction to the trend. Until then, we expect prices to remain flat.

WTI

 

Gold Pulls Back from Highs

The precious metal managed to log another week of gains. However, last week's volatility failed to push gold prices any higher. The precious metal is likely to remain in a wait-and- see mode heading into this week. Important events such as the FOMC meeting minutes, the ECB minutes and Jackson Hole symposium will be some of the catalysts for gold.

 

XAUUSD Could Turn Weaker if 1500 Support Fails

Price action in gold remains somewhat mixed with the support level near 1500 likely to be critical. Given that gold failed to post fresh highs, we anticipate a steeper correction if the 1500 psychological support gives way. This will pushed gold prices down to test the lows of 1485. To the upside, gold will need to post higher highs to confirm the upside bias.

XAUUSD

This market forecast is for general information only. It is not an investment advice or a solution to buy or sell securities.

Authors' opinions do not represent the ones of Orbex and its associates. Terms and Conditions and the Privacy Policy apply.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD clings to 3.5-week’s high, trades above 1.1000 figure

The pair is challenging the 1.1047 resistance. EUR/USD bull recovery from 34-month lows remains intact. Further coronavirus headlines are awaited.

EUR/USD News

GBP/USD hits new 2020 low and bounces amid Brexit rhetoric, coronavirus headlines

GBP/USD is trading above 1.2800 after hitting a new 2020, nearing the 1.2700 figure, as concerns about a no-trade-deal Brexit are weighing on the pound. Modest recovery seen in USD during the American session keeps the bearish pressure intact.

GBP/USD News

XAU/USD tumbles near two-week’s lows, sub-$1600/oz

Gold has been dropping sharply this Friday while reaching the 200 SMA on the four-hour chart. XAU/USD bulls gave up as sellers took the market down sharply. The bears seem to be in charge and more down could potentially be expected. 

Gold News

WTI remains under pressure around $45.00

Nothing new around crude oil prices, with rising concerns on the Chinese COVID-19 and its potential impact on the economy and the demand for the commodity keeping traders’ sentiment well depressed.

Oil News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex Majors

Cryptocurrencies

Signatures