Technical analysis: key levels for gold and crude

Both crude and gold continue to consolidate, following recent gains. However, with crude trading around a multi-year resistance zone, we could see directional volatility come back into play soon enough. 

Oil plant
Source: Bloomberg

Gold uptrend remains intact

Gold is rallying after yet another sell-off which failed to break below the key $1260 support level. As such, the gradual recovery we have seen since the early October sell-off remains on track.

An hourly close above $1272 would provide us with a sign that we are breaking higher once more.

Conversely, an hourly close below $1260 would be a warning sign that the selling pressure could be coming back into play.

Brent consolidation continues

Brent has been seeing relatively choppy price action over the past three weeks, with price rotating between $51.23 and $53.94. We are currently in the ascendancy following a sharp deterioration into the lower end of the range. As such, further upside seems likely, with an hourly close above $52.72 providing a clue that we are heading towards the $53-$54 mark.

This consolidation takes place at a major resistance area historically and as such, a bullish breakout from here could provide a significant period of upside.

WTI turning higher following sell-off

WTI is similarly on the rise, with yesterday’s weakness providing us with another deep retracement within the $49.53-$52.22 range. An hourly close above $51.06 would provide a bullish short-term view for a move back into the $52 region. Similarly, we are at a crucial area of resistance historically, with a break above $52.05 providing a 15-month high.

As such, it makes sense to simply play the range until we see a breakout, which could spark a sustained period of directional volatility.

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