Technical analysis: key levels for gold and crude

Gold has been declining further, amid a rising dollar and fears of a US-China trade war. Meanwhile, Brent is rebounding in anticipation of a tumultuous OPEC meeting on Friday. However, could both markets be about to reverse?

Gold continues decline, moving towards Fibonacci support

Gold has continued its decline, with the break below trendline support on Friday sparking a sharp deterioration in the price. On the wider timeframes, we have set higher lows since the turn of 2016.

Thus, there is a good chance we could see the buyers come back into play around the 76.4% retracement ($1267). With that in mind, further downside looks likely, with the reaction at $1267 crucial in determining whether we are set to start turning higher again or not.

Brent rallies into 61.8% resistance

Brent has managed to regain ground following a disagreement over whether we will see a rise in the Organisation of the Petroleum Exporting Countries (OPEC) production or not on Friday. This has taken us into the 61.8% retracement level, with the wider creation of lower highs and lower lows still in play.

This has been accompanied by a trendline, which has been breached on several occasions but could provide some form of additional resistance. Ultimately, there is still a good chance of another turn lower, given the trend over the past month, with a break above 7749 required to bring us back into a more bullish formation. With that in mind, watch for a potentially bearish shift from either the 7548 or 7625 Fibonacci resistance levels.  

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find an article

Find articles by writer