Gold and Brent crude price gains could come under pressure
Gold comes into question, with a potential retracement move coming into play. Meanwhile, Brent gains are taking us back into key resistance once again.
Gold could be set for short-term pullback after recent surge
Gold has been playing out brilliantly, with the price hitting a seven-year high overnight. This is likely to persist before long, yet the decline below $1711 does raise the possibility of a short-term pullback coming into play.
Looking at the channel in play over the past two weeks, there is a chance that we could start to see a pullback to trendline support if prices manage to sustain below this $1711 level. Nevertheless, a bullish wider outlook remains in play in either case, with such a pullback deemed a short-term retracement rather than something which would have wider implications. For the short term, watch for a firm break below $1711 or above $1726 to guide us on whether we pull back or break higher to continue the trend.
Brent fails to break trading range despite OPEC+ deal
Brent has acted as if the OPEC+ deal did not happen, with the price simply respecting the $32.04-$34.52 range once again. The breakout from this pattern is likely to come to the upside given the trend coming into it, yet we are probably best served expecting to see further consolidation until such a breakout occurs to guide us on direction.
With that in mind, while we could see further upside this morning, it will be crucial to watch the $34.52 level as this would need to break to bring a more confident bullish view. With the stochastic breaking below 80, we are already starting to see bearish sentiment come back into play to signal a move lower before long. Previous occasions has shown us that such a breakdown may not necessarily come after the first break below 80, yet it has been a precursor to an eventual breakdown which could come on after another leg higher in price and stochastic.
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