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Technical analysis: key levels for gold and crude

Commodities are on the decline, with gold and crude selling off across the board. Will the sellers maintain control considering the recent uptrends across these markets?

Gold
Source: Bloomberg

Gold rallying back towards key resistance
Yesterday saw gold break through a cluster of support levels, with both an ascending and descending trendline converging around the $1240 level. We are seeing a rally back towards the overnight peak of $1238, yet given the weakness we have seen recently, another leg-lower seems more likely than a recovery for now.

As such, a short term bearish view holds unless we see an hourly close above $1240. Look out for $1235 (76.4% retracement) as a possible near term level that could limit the current upside. Support levels of note are $1225 and $1224 and $1212.

Gold chart

WTI shows weakness
Following on from Friday’s break below $39.11, WTI is showing clear signs of weakness. We have seen the creation of both lower highs and lows, which provides us with a bearish short-term view, where a rally would be seen as a retracement rather than anything more. This view holds unless we see an hourly close above $38.73. Support levels of note are at $37.50, $37.23 and $37.07.

WTI chart

Brent breaking lower
This morning has seen Brent break to a new 10-day low following on from a clear bearish turnaround for the market. We have seen price hit trendline support, which could provide a bounce for the session. However, the key is that we are seeing clear lows and lower highs being created here. Thus until we see a closed hourly close above $40.04, a bearish view is in play.

It is worthwhile watching for the lower descending trendline as possible support too (currently at $38.65). Until we break to a new high, any rallies are seen as opportunities for a better entry price to continue this recent move lower.

Brent chart

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