Technical analysis: key levels for gold and crude

Gains for crude begin to give way as Brent and WTI both hit key trendline resistance. Meanwhile, gold appears to be back in fashion, as it looks to push on from Friday’s gains.

Gold bullion
Source: Bloomberg

Gold back from the brink
The commodity has truly bounced back in style, with Friday’s payrolls number providing a major spike higher through the crucial $1234 resistance level.

We are currently seeing some hesitancy, thus it seems worthwhile being bullish for an hourly close above $1248. This should avoid getting involved in any potentially long winded retracement. To the downside, key support levels are $1234 and $1224.

Gold price chart

Brent reaches key resistance level
The oil has seen early gains move into the key $50.35 resistance level. This represents not only the 76.4% Fibonacci retracement, but also the top of a rising wedge pattern. With that in mind, the risk/reward associated with being short makes more sense than to be bullish right now.

As such, a bearish view is in play unless we see a break through $50.45. The key signal to a more protracted pullback would be an hourly close below $50, which would point towards trendline support.

Brent crude price chart

US crude reaches triangle top
WTI has reached a crucial resistance trendline which represents the top of a symmetrical triangle formation. Given the break lower from the $50.28 top in late May, there will be many thinking we could be seeing some form of near-term top. With that in mind, it seems likely we will see this triangle top hold, providing a bearish view for today.

Ultimately, the medium-term direction will be determined by an hourly close above $49.62 or below $48.55. Until that happens, it makes sense to continue to play this triangle.

WTI price chart

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