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Technical analysis: key levels for gold and crude

Friday’s weak payrolls number provided commodities with a welcome end to the week. With that in mind, we are looking for bullish setups to get into these new short-term trends.

Mining
Source: Bloomberg

Gold wedge follows bullish breakout

Gold finally managed to get back into a bullish outlook on Friday, after price came precariously close to the critical $1300 support level. Fortunately, the bullish medium-term outlook remains intact and given the break through the $1325 swing high, it looks like we are set for further gains.

The question is whether that will occur this morning or at a later date. The answer to that question will come upon the resolution of the current rising wedge pattern. A break below trendline and $1322 support would provide a bearish short-term outlook. However, with a key swing low of $1316 nearby, and a bullish medium-term view in place, it would make sense to instead see such a move as an opportunity to get long at a better price.

Alternately, a bullish breakout would look towards $1330 as the key level to be taken out as a means to pushing on with the recent resurgence.

Gold

Brent spikes into key resistance

Friday’s NFP-fueled dollar weakness helped crude prices regain ground, much like gold. However, we have had to wait until today to see the recent downtrend negated, with a break through the crucial swing high of $47.26. A sharp appreciation this morning brought price into the key head and shoulders neckline of $48.82.

The current pullback from that level is more a reflection of the somewhat over-extended nature of that spike than anything bearish and as such, the bullish outlook remains unless we see an hourly close below $46.47 for Brent.

Brent Crude

WTI rallies out of downtrend

WTI is also on the rise, with the break above $45.28 providing a new bullish outlook following a week of downside. Much like Brent, any downside will be seen as a temporary retracement prior to another leg higher, with a bullish view in play unless we see an hourly close below $44.36.

WTI

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