Technical analysis: key levels for gold and crude

Crude and gold look to gain ground this morning, yet while it looks like it could last for Crude, this gold resurgence should be treated with a degree of suspicion.

Source: Bloomberg

Gold finds a buyer
The price has managed to regain some ground overnight, as the creation of a higher high points towards the possibility of some respite after an absolute rout in the past two weeks.

However, it is worth being wary of any short-term bounce within a very clear and consistent downtrend in play. With that in mind, there is a good chance the upside we are currently seeing represents a retracement of Friday’s sell-off.

As such, we would be looking for gold to turn lower at either the 61.8% ($1214) or 76.4% ($1218) retracements. Conversely, a closed hourly candle above $1223 would provide a more bullish view.  

Brent hits a cluster of support
The oil has pulled back to trendline support this morning, following another higher high set yesterday. There is a very clear uptrend in play over recent months and thus we are more inclined to believe this will continue for now.

With the 50 and 100-hour simple moving average (SMA) also joining trendline support and the 61.8% Fibonacci retracement, a move higher seems likely from here. This would be negated with a closed hourly candle below $49.53. 

WTI bouncing from Fibonacci retracement
Much like Brent, WTI appears to be finding support on a cluster of support indicators, with the 61.8% Fibonacci retracement coinciding with the 100-hour SMA around $49.46.

We prefer to buy into this uptrend and as such, a bullish view is preferred despite early weakness this morning. This holds unless we see an hourly close below $49.20. Key resistance levels are $49.89 and $50.28.

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