Technical analysis: key levels for gold and crude

Both gold and Brent are beginning to show signs of weakness, despite recent trends. 

Gold attempts to recover from overnight losses

Gold sold off sharply overnight, with the price hitting $1325 for the first time this week. The sharp nature of that decline has now given way to a period of consolidation, which looks likely to provide a short-term retracement towards the upside.

With that in mind, the downtrend remains intact, yet there is a strong chance of a move back to the upside, in order to retrace the $1340-1324 sell-off. That being said, this short-term bearish trend would only be negated with a break back above $1340. Until then, a short-term bounce would be seen as a precursor to further losses, and a fall back below $1324.

Brent begins to show signs of weakness from $70.00

Brent has struggled to clear the $70.00 handle this week, with the price turning lower after Monday’s attempt to break to the upside.

The key level to watch here is $68.40, where an hourly close below that level would complete a head and shoulders formation, providing a bearish outlook for Brent. With that in mind, watch for a break above $70.00 (bullish), or below $68.40 (bearish) to provide a directional bias for this market. 

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