Technical analysis: key levels for gold and crude

Gold and crude follow the indices lower, with substantial losses instigated on Friday. However, while this sets a precedent, there is a chance for a bounce in the meantime. 

Gold
Source: Bloomberg

Gold sell-off likely to continue

Gold has seen a continuation of the weakness seen on Friday, with the continued creation of lower highs and lower lows. This morning has seen price rally into trendline resistance, which coincides with the $1330 swing low from Friday. 

Whether or not price sells off from here, the key is the ability to continue creating lower highs and as such, a bearish view remains unless we see an hourly close above $1340.

 

 

Gold chart

Brent sell-off catches a bounce 

The recent sell-off for Brent has brought price back below the $48.33 swing lower, providing us with a clear bearish outlook. 

However, we still have not seen a significant bounce and given the strength seen this morning, it is worth considering whether we will see that today. 

Given that the next important support level is relatively near at $47.08, it makes sense to await a break below that level to signal the continuation of this downtrend. Otherwise, keep on the lookout for short-term reversal signals with the retracement likely to be sizeable given the sell-off preceding it.

 

Brent chart

Will WTI take a breather?

WTI has similarly sold-off heavily, with price breaking below the key $46.16 swing low. We are clearly oversold on the four-hour chart, and with the price attempting to make its first green candle in ten, there is a potential for a bounce in WTI. 

A break back below $45.28 could lead us on another leg lower, yet a bounce towards $46.16 seems a strong possibility from here. 

WTI chart

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