Technical analysis: key levels for gold and crude

It looks like crunch time for gold’s 2016 rally, with key support looming. Meanwhile, oil remains stuck between two trendlines, with the outcome of upcoming price action crucial for its own 2016 surge.

Oil barrels being inspected
Source: Bloomberg

No end in sight for gold losses

Steady losses show no sign of stopping here, with the big question being whether the $1305 support level is broken. This is particularly vital, as the horizontal support from the lows of June and July meets with rising trendline support from the lows of December last year.

A break here would mark a definite departure for gold, with $1281 and then the 200-day simple moving average (SMA) at $1273 in sight. A rally needs to clear $1325 and break the sequence of descending highs. 

WTI in between trendlines

Oil watchers will be keeping a close eye on two trendlines, the rising one from the January lows, and then descending one off the June highs.

Last week’s peak saw the price fall back from the descending trendline, and now we look to see if the rising one can provide support around $42.85, with the 200-day SMA thrown into the bargain. Any bounce would then look to head back to $47.50. 

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