Technical analysis: key levels for gold and crude

Gold consolidation looks likely to reverse towards the upside, while Brent gains expected to extend once more.

Gold showing signs of potential reversal

Gold has been consolidating around the confluence of trendline and 61.4% Fibonacci support, coming off the back of a drop below the notable $1303 level. Looking at recent price action, we are seeing a host of indecision candles with long, lower shadows.

With the wider trend showing higher lows since the beginning of 2016, there is a strong chance this current short-term period of downside was going to turn higher once more, rather than break below $1236. As such, watch for a potential bounce from here, where a break below the $1280 low from yesterday would negate hopes of a bounce from this level.

Brent moves higher following retracement

Brent is moving higher once more, with the retracement seen throughout the end of last week being left in the rear-view mirror as the price pushes on towards the $80.44 high from Thursday.

The continued creation of higher highs and higher lows points towards a short-term trend, which continues to push onwards. As such, a bullish outlook remains in place, as long as we remain above the most recent low of $77.60.

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