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Technical analysis: key levels for gold and crude

Gold and crude both reverse recent moves, with gold pulling back and crude rallying. However, while gold remains within an uptrend, crude appears to have turned, with a bullish view now in play.

Gold bullion
Source: Bloomberg

Bullish gold outlook remains despite pullback

Gold has seen a sharp pullback overnight, following a downside break from a symmetrical triangle formation. Price has not broken below the $1346 support level which means we remain within an uptrend. As such, another leg higher seems likely from current levels.

Given that price is currently around the 76.4% retracement, it makes more sense to be long for a move back to $1367 than below $1346 given the 3:1 risk to reward ration attainable. This bullish view would be negated should we see an hourly close below $1346.

Gold price chart

Brent breaks out of downtrend

Brent appears to have broken out of its downtrend, with price pushing through the crucial $43.22 level. Interestingly, the trendline break provided a good indication of this break. Essentially unless price moves back below $41.64, another leg higher seems likely.

As such, a bullish outlook is in play, with retracements down to the 61.8% ($42.43) or 76.4% ($42.13) providing bulls with an interesting entry area. 

Brent crude price chart

US crude breaks higher to confirm bullish bias

US crude has also broken through a key resistance level, $41.23, thus creating a new higher high. This means we have confirmation of the move across both Brent and WTI. As such, a bullish outlook is in play, with further gains likely.

The depth of this pullback is difficult to predict, yet either an hourly close above $41.74 or a move back into a key Fibonacci level (61.8% at $40.41 or 76.4% at $40.09) would provide a good area to get long. We would need to see an hourly close below $39.59 to negate this bullish view. 

US crude price chart

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