Technical analysis: key levels for gold and crude

Gold continues to tumble as we head into key support. Meanwhile, WTI is continuing its sharp rise despite the rise in OPEC production. 

Gold heading to critical support level

Gold has continued its downturn, with the recent break below 76.4% support pointing towards a potential impending breakdown.

For that to happen we need to see a break below $1236 support, bringing a breakout from the triangle formation that has been in play over the past two years. For the short term, look for a break through $1260 as a signal of easing near-term weakness. Until then, further downside looks likely.

WTI remains the outperformer

WTI managed to break to a June high earlier in the week, with the Organisation of the Petroleum Exporting Countries (OPEC) production hike failing to overshadow impending Canadian output weakness and US led Iranian sanctions.

The break through $67.04 provided a bullish outlook, with the rally leverage of trendline resistance/support providing the next leg higher. To the upside, $72.88 looks like a key resistance level to watch, with a break above there pointing towards a continuation of this recent strength. A break below the recent swing low of $71.73 would signal a potential impending pullback.

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