Gold, Brent crude, and copper prices at risk of bearish turn after recent resurgence
Gold, Brent crude, and high grade copper regain lost ground, but bearish trends point towards a potential move lower coming back into play.
Gold trading within reach of critical support level
Gold is trying to find some stability this morning, coming off the back of yet another week of significant declines for the precious metal.
Down below, we need to be aware of the existence of the $1676 support level, below which we are looking at a more dramatic period of downside for gold. As long as price remains above that level, there is a real potential for a rebound to ensure price remains within the range seen over the past two years.
The four-hour chart highlights how we are seeing price move higher this morning, although the intraday downtrend remains in play for now.
To the upside, we do need to watch out for whether price can push up through the $1745 swing-high. As long as we remain below that level, there is a risk price rolls over to continue this bearish pattern.
However, we would be looking through a more bullish lens if we do finally manage to break out of this trend of lower highs by climbing through the $1745 level.
Brent crude on the rise, but bearish trend looks likely to challenge the bulls
Brent crude has enjoyed a positive end to the week just gone, with price climbing back above the $100 mark.
This flies in the face of the bearish trend that has been dominating over the course of the past month. However, that bearish intraday trend does still remain intact for now, with the pattern of lower highs and lower lows in place unless price breaks up through the $106.25 swing-high established on Friday 8 July.
The gains seen coming into this morning thus provides a potential shorting opportunity given the trend in play. The 61.8% Fibonacci resistance level ($101.08) is currently being taken out, with the 76.4% ($103.05) worth watching as a potential area for the bears to come back into play.
A decline back out of overbought on the stochastic would provide another sell signal. That bearish view holds unless we see price overcome the $106.25 swing-high.
High grade copper rallies into confluence of resistance
If copper is a bellweather for global economic health, the outlook has clearly taken a turn for the worse over the course of the past six weeks.
Since the beginning of June, we have seen price collapse by 28%, despite the gains seen since Friday. That rebound brings price back into a confluence of horizontal and trendline resistance.
With that in mind, the gains we are seeing should soon be challenged around the $3.3154 level. With the stochastic pushing up into overbought territory for just the third time in the past six weeks, there is a chance we are seeing a good selling opportunity come into play once again.
As such, watch out for a reversal back down through the 80 threshold as a sell signal for copper. A break up through $3.5803 would point towards a bullish reversal coming into play.
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