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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Technical analysis: key levels for gold and crude

Crude continues to sell off sharply, and gold is beginning to show signs of weakness after a failure to create a higher low for the first time in three weeks. 

Oil pump
Source: Bloomberg

Gold showing initial signs of weakness

Gold has failed to create a new higher low, with the move back to $1259 support overnight. This is the first time in three weeks that we have seen such an event, and it could signal the beginning of a more bearish period for gold. For that to come to fruition, we would need to see an hourly close below $1259.

Conversely, for the bullish outlook to remain relevant, we would need a break through $1269.  

Brent breakdown continues apace

Brent is working out nicely, with the head and shoulders leading to significant losses for crude prices. Further declines seem likely, yet it makes sense to look for retracements for short opportunities given the extended nature of this sell-off.

As long as we do not see a break back above $51.45, a bearish view remains. 

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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.

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