Technical analysis: key levels for gold and crude

Crude and gold could be set for reversals of recent trends, with gold managing to find some buyers at a critical support level, while crude continues to consolidate amid mixed market messages.

Gold shows signs of life at major support level

Gold managed to rebound from very close proximity to the $1236 support level, providing some signs that we could be due a more protracted bounce going forward. The move above the $1255 swing high points towards the possibility of a bullish phase coming into play. A break below that $1236 level would provide a wider bearish outlook, paving the way for a possible breakdown in the price beyond what has happened over recent weeks.

Given the wider importance of that $1236 level, we are either looking for a bearish move below $1236, or a possible rebound as long as the price remains above that level. With that in mind, there is a good chance that the weakness we are seeing today is part of a retracement before we move higher once again. Look out for Fibonacci support as potential bullish reversal points, with a bullish short-term outlook remaining as long as the price is above $1236.

Awaiting breakout amid Brent consolidation

Brent is consolidating, with the price of crude falling in the wake of US President Donald Trump’s tweet highlighting the need to drive down energy prices.

However, there is also a clear wider bullish trend in play. Thus, we await a breakout from this phase, with an hourly close above $78.20 providing a bullish breakout signal. To the downside, a move below $77.52 would provide signs of further short-term weakness.

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