Technical analysis: key levels for gold and crude

A weaker dollar following on from the Federal Reserve meeting has given the commodity complex the excuse it needed to rally, putting gold, brent and WTI on an upward path.

Source: Bloomberg

Gold moves higher

Yesterday’s Fed meeting sent gold moving sharply higher, pushing through the 13 September high around $1330, and leaving it well-positioned to head to the early September peak at $1355.

If the bounce continues then gold has avoided making a new lower low, and we could be seeing the beginning of a breakout from the downtrend off the July highs. The price is relatively overextended intraday, so we could see some short-term weakness, but any dips are likely to see fresh buying. 

Brent set for further gains

Having built a base above $45.60, the price has moved sharply higher, with the possibility of further gains ahead. If we see more upward moves then $48.80 would be the next target, and then on to $50.22.

It will take a firm close below $45 to indicate that the key support area of late August and September has been broken.

WTI looks to begin new upward leg

It looks increasingly likely that we will see a push towards $47.50, which would bring the price back into contact with the descending trendline off the June highs. WTI needs to break this to begin a new upward leg.

A failure to push on would see it fall back towards $44, and the rising trend from the lows of the year. The strong moves of the last few days have put the bulls in charge for now. 

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