Technical analysis: key levels for gold and crude

Gold prices continue to tumble, yet with Fibonacci support in play, will we see a recovery? Meanwhile Brent needs to recover quickly, or else things could start to turn ugly.

Gold bar
Source: Bloomberg

Gold downtrend runs into crucial Fibonacci support

Gold is selling off once more this morning, in a continuation of the downtrend seen since topping off at trendline resistance last month. However, with 2017 having exhibited a wider uptrend thus far, we would need to break below the $1240 swing low to negate the view that we could turn higher before long.

With that in mind, it is notable that we are currently trading around the 76.4% retracement. There is also reason to believe we could turn higher from here. However, for greater confirmation of a bullish reversal, we would need an hourly close above this morning’s swing higher of $1257. Until then, the short-term downtrend remains intact.

Brent channeling towards critical support level

Brent’s attempt to rally yesterday fell afoul of trendline resistance once more, with the market selling off sharply as a result. Crucially, we saw that move lower take us within striking distance of the absolutely critical $49.92 support level.

The subsequent rebound seems to have been stifled around the April low of $51.01, with price drifting lower since. Crucially we are either going to break below $49.92 to bring a strong bearish signal for the medium term, or else an hourly close above $52.18 to portray a short-term bullish recovery.

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