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Technical analysis: key levels for gold and crude

Gold is looking likely to break higher once more following consolidation at a key support level. Meanwhile, the selloff continues for crude, with a late rally yesterday failing to regain important levels.

Mining
Source: Bloomberg

Gold bulls expected to return

Gold has been consolidating since yesterday’s peak of $1100, with price trading sideways utilising the $1098 level as support (16 October high).

Gold has clearly completed this long bottoming formation, where the longer term pattern has also been replicated once more in 2016, with the bottom coming at a perfect inside trendline support on 14 January.

Thus we have a bullish outlook with $1098 a likely level which could provide the base for another leg higher. Should that occur, resistance levels of $1110 and $1113 would be the first in question.

Conversely, a closed candle below $1098 would provide evidence of a possible stronger retracement back down to $1089.

Gold

US crude continues downtrend

US crude is selling off once more this morning, with a short-term bounce failing to last as we head back down towards yesterday’s low of $27.58.

Crucially, the rally staged late into yesterday’s session failed to create a new high, selling off once more from below the $29.22 high of the day.

We are yet to see any bullish signs and thus the bearish view remains in play with yesterday’s low of $27.58 the obvious support level of note.

A closed candle back above $29.22 would be needed to provide any sort of counter narrative to the current downtrend.

US crude

Brent selling into yesterday’s low

Brent is selling off once more this morning, despite attempting to stage an overnight bounce.

The $28.66 level once more proved a crucial level, with Brent selling off ever since. Thus any rally will be watching this level once more for further resistance.

However, the downtrend is clearly in play and we have seen no bullish reversal signals.

As such, yesterday’s low of $27.43 seems likely to be reached before long with a closed hourly candle below this level the signal for further losses.

Brent

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