Gold bounces off 1-year low but retains bearish outlook [Video]

EUR/USD stands below 20-day SMA, Gold bounces off 1-year low but retains bearish outlook [Video]

(Melina Deltas, CFTe – XM)

EUR/USD stands below 20-day SMA; maintains bearish bias

EURUSD remains under pressure and the risk is still to the downside as prices continue to drift lower from the 20-day simple moving average (SMA) and the latest high of 1.0280. The short-term technical indicators are still holding in bearish territory. The RSI is pointing downwards below the neutral threshold of 50, while the MACD is rising above its trigger line in the negative region.

The next target to the downside is the parity level again, which the price failed to have a daily close beneath it. However, the price may meet the spike of July 14 that reached a new 20-year low at 0.9950. Further losses could open the way for a test of the return line of the downward sloping channel around 0.9800 ahead of the 0.9610 barrier, taken from the low in September 2002.

Upside moves are likely to find resistance at 1.0280. Rising above this area would help shift the focus to the upside towards 1.0345 before meeting the descending trend line, which is standing near the 40-day SMA at 1.0400. Breaking this level could see a re-visit of the 1.0635 high and turn the bias to bullish.

In the medium-term, the bearish phase remains in play especially if prices continue to trade within the channel and below the SMAs.

Gold bounces off 1-year low but retains bearish outlook

Generating a profound structure of lower highs and lower lows. Although the precious metal managed to cease its decline at the one-year low of 1,681 and recoup some losses, its bearish technical picture remains intact.

The momentum indicators reflect a cautiously positive neat-term bias. Specifically, the stochastic oscillator is sloping upwards towards its 80-overbought zone, while the MACD has crossed above its red signal line but remains in the negative territory.

Should buying interest intensify further, the price may encounter initial resistance at the 1,755 barrier. Any further advances could then stall at the May support of 1,787 before the 1,880 peak appears on the radar. An upside violation of the latter could open the door for the 2,000 psychological mark.

On the flipside, should the decline resume, the one-year low of 1,681 might act as the first line of defense. Breaching this zone, the spotlight could turn to 1,640, which acted both as support and resistance in April 2020. Failing to halt there, the bears might then aim for the March 2020 support of 1,570.

Overall, even though the market is trying to push for some recovery in the past few daily sessions, gold maintains both its bearish short- and long-term outlooks. For the former to alter, the price needs to decisively cross above the 1,880 ceiling.