Technical analysis: key levels for gold and crude

Gold has dropped into a crucial support level, yet could the sell-off be short-lived? Meanwhile, Brent is turning lower once again after the recent rebound.

Gold challenging critical support level

Gold has managed to break lower from a rising wedge formation, with the price now challenging the crucial $1228 support level this morning. A break below that level would point towards further downside coming into play.

Interestingly, with the 61.8% retracement of the wider move ($1218-1243) coinciding with that $1228 swing low, there is a strong chance of a rebound from here. While it would provide us with flatlining lows on the shorter-term intraday trend, it would also represent a wider retracement without actually needing to break from this shorter trend. Should we break below there, the 76.4% retracement ($1224) would be the next key support level. However, ultimately, we would need to see a break below $1218 to negate the uptrend in play throughout October.

Brent turning lower from trendline resistance

Brent managed to rally into trendline resistance on Friday, with the price now starting to reverse lower from the confluence of Fibonacci (50%) and trendline resistance.

The downtrend seen throughout October remains in place, with the $75.56 level representing the next major hurdle to overcome. With that in mind, it makes sense to look out for a potential leg lower from here, with a break below that support level pointing towards a continuation of this downtrend.

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