Gold correction shows signs of slowing
The weakness in gold seen yesterday was viewed in the context of a strong start to the month and, thus, for the most part it was likely to be just a retracement. Therefore, we are looking for signs that it is bottoming out on the intraday markets.
Today’s marginal gains show the possibility that this is happening and I am awaiting a move above $1189 to create a new intraday high. Given that this level has held as resistance today, I am expecting to see some weakness come later in the day. Yet, should we fail to see any move below $1179 then this could look like the beginning of a resumption of the uptrend expected following the bounce seen at the beginning of the month.
Silver selloff hits the buffers
The silver selloff following a move towards the top end of a symmetrical triangle has run into support at the 61.8% Fibonacci retracement at $16.18. Despite that, the intraday moves have failed to create a new higher high which points to further losses. For the time being, I remain bearish, unless price moves above $16.50.
Evening star formation spells trouble for Brent
The $70 mark has proven too tough an ask for Brent crude, which has shown significant signals that we could be moving into a bearish period. Yesterday’s close came following a gravestone doji on Wednesday, and following a strong selloff, we have now seen an evening star formation created which is a strong bearish indicator. Yesterday also saw a head and shoulders formation, which provided the warning signs and a downside target of $64.61. With price just $0.80 above that level now, the question is now going to be whether this is the start of something bigger and I believe it is.
Price has created new lower lows to accompany the lower high and this makes me think that we are moving into a change in sentiment and for that reason I am bearish going forward.
WTI reaches crucial support level
The selloff seen in Brent has translated to a strong move lower, following a similar head and shoulder formation yesterday which provided a target of $58. With some strength coming back in WTI light throughout this morning, there is the possibility of a little upside, but, as with Brent, I believe we could see another leg lower soon.
Any further upside would look towards resistance around $59.90 which is both the early May swing high and descending trendline from Wednesday. But ultimately I am expecting a move lower given the moves in Brent. Most important to that would be a move below $58.32, which would create the new lower low following the lower high. Should that happen I would feel increasingly confident with my bearish bias.