Technical analysis: key levels for gold and crude

Countertrend moves see crude rally and gold sell off. However, this is deemed temporary and we await signals the trend is set to continue.

Oil processing plant
Source: Bloomberg

Gold to continue retracement?
The gold rally from last week certainly saw markets get a little carried away and at some point this was likely to fade. We are seeing that move lower now and as such, we expect more of the same until a signal arrives that the retracement lower is over.

Thus, a short-term bearish view remains unless we see an hourly close back above $1214. Resistance levels of note are $1205, $1214, $1232 and $1263. Support levels to watch are $1191, $1181 and $1170.

Gold chart

Awaiting bearish reversal signals for US crude
US crude has been rallying heavily over the past three trading days, adding around $5 from the lows of last week. This is certainly a countertrend move and thus we will be watching carefully for bearish reversal signals to bring back the primary view that further losses are around the corner.

However, for now, it will be key as to whether price manages to break through the key $33.30 and $34.30 resistance levels. We have yet to see any bearish signals, but these two levels will be expected to provide a stern challenge to this current rally.

As such, further upside seems possible, yet the bearish view seems highly likely to return in the near future. Support levels to watch out for in the event that the sellers do start to dominate once more are $32.70, $32.00, $30.48 and $27.92. 

US crude chart

Brent reaches key resistance
Brent has been rallying heavily recently, with price reaching the crucial $35.96 resistance level which represents the February high so far. The bearish outlook remains our primary trend and this rally represents a short-term phenomenon which is likely to give way once more in the near future.

This $35.96 level represents the kind of possible reversal point we are looking for and it will be well worth watching for signs of a bearish turn. We have not seen one yet. Key resistance levels are $35.96, $36.10 and $36.74, with support levels at $35.02, $34.52 and $3370.

Brent crude chart

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