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Technical analysis: key levels for gold and crude

This morning sees gold and crude rally amid signs of further weakness.

Gold bars
Source: Bloomberg

Gold breaks below key support level
​Gold has retraced lower this week, with yesterday seeing a break below both the $1351 and $1335 support levels. With that in mind, there is likely to be further downside to come despite the current bounce.

The next notable swing high is around $1358, which would need to be broken to return the bullish bias of the medium-term. However, for the short-term, it seems likely that we will see further losses, with the 76.4% retracement (also at $1351) the most interesting resistance level in view. 

Gold chart

Brent rally unlikely to last
​Brent broke back into the triangle pattern yesterday, with a sharp rally into the trendline and Fibonacci resistance. We have got very clearly defined lower highs in place here and until we see an hourly close above $49.74, it seems likely that we will see another move lower soon.

The stochastic oscillator is clearly turning lower from an overbought position, adding further credibility to the idea that we will see the sellers come back in soon enough.

Brent chart

US crude expected to turn lower
WTI has also been seeing substantial gains yesterday, yet looks likely to sell-off given the existence of trendline, Fibonacci and simple moving average (50) resistance. We would need to see an hourly close above $48.64 to negate this bearish view. 

WTI chart

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