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Technical analysis: key levels for gold and crude

After last week’s resurgence comes a bearish turnaround for gold and crude, with reversal signs coming into play.

Gold bars
Source: Bloomberg

Gold back into triangle top

Gold saw a sharp appreciation last week, with a swift rally into the 76.4% retracement. However, this bullish outlook is now coming into question and we could be set for a period of weakness.

The overall view for gold is bullish, yet we would need to see a break through $1352 to signal an end to the consolidation that has been a feature of gold over recent months.

Current price action is looking like potentially creating a topping pattern, with an hourly close below the $1331 support sparking a bearish outlook. Could we be set for yet another week where we simply rotate between the boundaries of this pattern?

Gold daily chart

Brent sells off from trendline resistance

It’s a big week for crude, with the oil-producers meeting likely to drive volatility. Friday saw brent sell-off sharply, following a rally into and inside trendline resistance. Seemingly, the bounce this morning has been fleeting at best, and confirmation that the sell-off is set to continue would come with an hourly close below $46.12.

Should that occur, we would be looking at $45.35 as the next important support level. A break below that could spark another sharp leg lower for brent.

Brent daily chart

WTI selling off towards triangle bottom
​WTI also sold off sharply on Friday, with this market turning lower from the 70% retracement. We have a clearly defined descending triangle pattern in play here and as such, a move back down to the $43.22 area looks likely.

An hourly close below $44.30 would provide a bearish signal that we are going to see that move into triangle support ($43.22), whereas an inability to close below $44.30 would point towards the potential for a short-term retracement of Friday’s sell-off. 

WTI chart

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