Technical analysis: key levels for gold and crude

Gold pauses for a breather following a sharp rally which keeps our medium-term bull view intact. Meanwhile, in Brent, the creation of a double-top looks to signal the end of its recent resurgence.

Gold bars
Source: Bloomberg

Gold rally halts

Yesterday’s rally in gold came off the back of a similarly sharp downturn last week. The overall wider bullish view remains in play and as such we were looking for longs despite recent weakness. Certainly the $1338 neckline break was a strong signal yesterday, with price coming back to retest this level following the breakout.

We have since seen a strong move higher, with price currently consolidating from an overbought position. It does not make much sense to add any new positions from here unless we receive a signal that a pullback is not in the offing.

As such, an hourly close below $1351 would point towards a more protracted move lower, with an hourly close back above $1355 needed to provide a resumption of the uptrend.

Gold price chart

Brent double-top points to losses

Brent has formed a double-top formation following the strong move higher in recent days. This points towards the potential for this uptrend to be under pressure and such, further losses seem likely from here.

An hourly close above $45.23 would be required to negate this view. Watch out for support levels at $44.13 and $43.59, whereas resistance would be found at $44.82, $45.23 and $45.89. 

Brent crude price chart

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