Technical analysis: key levels for gold and crude

Gold could see further downside, despite current gains. Meanwhile, Brent is breaking higher, with $70 resistance coming into view.

Gold rally could be short-lived

Gold continues to move higher following Friday’s low of $1319, with overnight losses turning into the green this morning. However, with the price having broken below the $1321 support level on Friday, it points towards the potential for this current rally to be a retracement rather than a bullish reversal.

With that in mind, look at the 61.8% and 76.4% retracements as a potential area for the price to turn lower once more. A break above $1348 would negate this view. Ultimately this market is heavily reliant upon fundamental and news driven factors at the moment. As such, keep an eye out for Chinese and US comments over trade.

Brent breakout brings $70 back into view

Brent is surging higher following a break through trendline and horizontal resistance. The rally through $68.81 in particular highlights the view that we are set for further upside from here.

However, it is notable that we have a major resistance zone around $70.00-$70.85 to contend with. With that in mind, while there is a strong chance of further gains, the crucial thing is whether we finally push through that zone to bring about a more convincing bullish theme to trading. In the near term, be aware of the potential for a short-term pullback, with the price having to break below $66.61 to negate the bullish view.

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