Technical analysis: key levels for gold and crude

Consolidation is the name of the game, with both gold and Brent continuing to range after substantial rallies. With that in mind, range bound trading strategies make sense. 

Source: Bloomberg

Gold consolidating after channel break

Gold is proving remarkably resilient following a bearish shift last week, after price fell out of an ascending channel and below the key $1228 support level. We have since seen a period of consolidation, with a symmetrical triangle coming into play.

Ultimately we need to see a break through $1219 to provide a bearish signal. However, to the upside it is more difficult as any rally that falls short of the $1245 level could look like a retracement of the pullback from that level. As such, a push through $1245 is required to become bullish once more.

Brent in the middle of its range

Brent has turned lower from the upper end of its 2017 range, with a clear tug-of-war going on between bulls and bears over recent months.

The $53.00 mark is what needs to be broken to the downside to provide a more bearish medium-term outlook, whereas a break through $58.47 would signal a bullish resolution. Until either of these happen, it makes sense to keep playing the range. Further downside looks likely for now, with longs coming back into play around $55.00.

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.

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