Technical analysis: key levels for gold and crude

Commodity reversals continue to be in focus, as gold bounces from a key trendline and crude prices stumble.

Oil refinery plant
Source: Bloomberg

Gold trendline support sparks major bounce
Yesterday we were looking at a major trendline support which was going to absolutely dictate the state of play for the coming days. This has proven the case, with gold rallying heavily ever since. We do expect this to continue, with any pullbacks likely to be bought into for now.

The current red candle points towards some indecision in this rally, but further gains seem likely today, with $1280 the next key resistance level. A break back below $1265 would negate this bullish view.

US crude turning lower within descending triangle
US crude saw yet another rally from the $43.58 support yesterday. However, this appears to have come to an abrupt end, with sharp selling taking hold this morning.

The creation of lower highs to accompany the flat lining bottom means we have a descending triangle in play, which given the more bearish outlook provided by Brent, points towards a possible break below $43.58 in the end. For today, a bearish view is in place for a move back towards $43.58. At which point a break or reversal will provide the ongoing state of play.

Brent turning lower from Fibonacci resistance
The upward retracement in Brent yesterday provided a good opportunity to go short at a more preferential price for many, with a pullback to 76.4% preceding a sharp selloff.

Thus, it seems likely we will see another move back towards the $44.18 and $43.52 support levels in the coming days. On the flip side, a closed hourly candle above $46,44 would negate this bearish view. 

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