CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
Established in 1974
Over 185,000 clients worldwide
15,000 markets worldwide

Technical analysis: key levels for gold and crude

Crude selloff continues apace as both Brent and US crude approach major support levels. Meanwhile, gold remains within a channel as it sells off to the lower end of the range.

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
Gold
Source: Bloomberg

Gold channel remains key
Yesterday’s rally in gold was short-lived, with volatility surrounding the FOMC announcement bringing price back up to the channel top before selling off once more. Thus, price remains within this pattern and is expected to return to the bottom of the range before long.

Price is currently being held up by the 50-hour simple moving average (SMA) and this consolidation is expected to give way to further losses, which would be signaled by a closed hourly candle below $1066.

Support levels of note are $1062 and $1058, whereas resistance levels are at $1067 and $1070.

US crude sells off once more
The selling has continued apace in US crude, with the break through $37.63 support key to yesterday’s trade. We have since seen a gradual drift lower, with little in the way of retracements.

The next key support level is $35.78, below which we would be looking at yet another six-year low. Below that, $33.55 is the 2009 low.

The bearish view remains unless we see an hourly close above $37.22 which would then look towards $37.63 and $37.86 resistance.

Brent falling wedge in play
Brent has been even more consistent with its losses than US crude, forming a falling wedge formation over the past 24 hours. A falling wedge is typically seen as a bullish pattern, which would point towards an upside breakout.

Given the selling in the market, we have not seen any bullish reversal signs yet, but with price approaching $36.74 support there is the possibility of a bounce.

Therefore the bearish view holds, where $36.74 seems the crucial support level, with an hourly close below pointing to further losses. Conversely, a bullish break through the top of the wedge could signal a short-term rally back towards $37.82.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.  Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. 

CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.