Technical analysis: key levels for gold and crude

The crude sell-off remains intact, with both Brent and WTI selling-off sharply once more yesterday. Meanwhile, gold prices have finally caught a bounce, pointing towards the potential for a market bottom here. Today’s payrolls number will have a lot to say about whether or not that is the case.

Gold bullion
Source: Bloomberg

Gold attempts to rally out of downtrend

Gold managed to finally catch a break, thanks in no small part to yesterday’s weak US manufacturing PMI number. This has provided us with a crucial higher high given the break through $1312 resistance.

The current pullback could be a return of the recent weakness, yet given yesterday’s bounce came from such a critical support zone ($1300-1307), it could simply be providing a deep retracement before another leg higher. Ultimately the next week will be dictated by how the payrolls number will effect gold prices, with a strong non-farm payrolls figure likely to lead to selling, while a weak figure would likely help push prices back towards $1325 and $1345.

Meanwhile, it makes sense to look out for a potential 76.4% retracement for long entries, which could provide a cheap entry going into the payrolls number. 

Brent continues to sell-off sharply

Brent crude saw yet another sharp move lower yesterday, with price breaking below trendline support and consolidating overnight. We are seeing another leg lower coming into fruition here. As such, shorts remain in place, whereas any new positions make more sense upon seeing a closed hourly candle below $45.35.

We are awaiting a new higher high to negate this downtrend as a signal to get out of the shorts and as such, stops were shifted to just above $46.02. 

WTI breaking lower once more

WTI is looking to sell-off once more, in a continuation of this recent downtrend. Much like Brent, it is all about the continued creation of lower highs and lower lows.

As such, a bearish view remains unless we see an hourly close above $43.93. Conversely, new shorts make more sense upon seeing an hourly close below $43.22 rather than at current levels. 

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