Technical analysis: key levels for gold and crude

Gold continues its ascent, yet the wider downtrend is expected to kick in once more. Meanwhile, crude prices move into trendline support, set within rising wedge.

Oil barrels
Source: Bloomberg

Gold continues to move higher, yet sellers not far

Gold has enjoyed a particularly consistent uptrend over the past week, with the price moving towards the $1259 resistance level. While we have a very clear uptrend in place over the past two weeks, this is set within what looks like a bearish reversal for gold on the longer-term perspective.

With that in mind, while further gains could be in the cards, it makes sense to look for a potential bearish reversal play from the $1261-$1274 zone (61.8%-76.4%). As such, while we would need a break back below $1235 to negate the current uptrend, a bearish outlook will come back into play should we continue our ascent into those levels.

Brent moving into trendline support

Brent is selling off once more this morning, in a continuation of the weakness we saw at the back end of last week. The break through $49.92 last week provided us with a rising wedge pattern, which points towards a potential bearish break down the line.

However, for now, we are seeing a move into trendline support, which is worth watching for a potential rebound. Ultimately, we would need a break back below $46.20 to resume the bearish medium-term mindset. Until then, short-term losses are expected to see a move into trendline support, upon which the validity of this wedge comes into play. Make sure to keep an eye out for news coming from the meeting between OPEC and non-OPEC members.

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