Technical analysis: key levels for gold and crude

Consolidation is the name of the game, with gold and crude both waiting to make their next move.

Gold bars
Source: Bloomberg

Gold triangle points to gains
Gold has been largely consolidating over the past week, with early gains being erased and a subsequent rally once more being sold into.

Yesterday’s sell-off has taken us back into a support region, around $1350, with price creating a triangle pattern since. We are seeing an attempted break higher currently and as such, there is good reason to believe we could see another move higher from here.

The key bullish signal would be a closed hourly candle above the $1360 triangle entry. This would point towards a move into $1370 once more. However, an hourly close below $1350 would point towards the potential for this to be a bearish topping pattern, with $1342 and $1338 the next support levels. 

Brent rangebound since triangle breakdown
Brent has been trading sideways since breaking below the crucial $47.26 triangle support level. This breakdown was a bearish signal and now that we have seen Brent rally into the $47.30 area on two occasions, any other move into this area is likely to meet sellers once more.

As such, it seems prudent to get short of this market around the $47.20 mark. However, a closed hourly candle above $47.26 would provide a signal that we could see a more extended bounce towards $48.90.

US crude maintains descending channel
WTI is rallying from trendline support this morning, following on from a sell-off last week. Given the move into this pattern, further downside is expected unless we see an hourly close above $46.28.

With that in mind, it makes sense to be bearish upon moving into the top end of this channel. Crucially, the trendline resistance would coincide with the June low of $46.00.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.