Technical analysis: key levels for gold and crude

Gold pushes lower despite short resurgence last week, while the weekend’s production cut agreements between both OPEC and non-OPEC members has driven a sharp appreciation for the price of crude. 

Gold bars
Source: Bloomberg

Gold continues to descend

Gold has been turning lower since hitting the $1180 region on Thursday, with the wedge break crucially failing to push through the $1181 region.

Subsequently we have seen price moving lower in a very considered and steady manner. With price passing through $1157, the downtrend in play over the past month remains intact, with further losses expected.

We would need to see an hourly close above $1181 to negate the current downtrend and until then, rallies will be seen as opportunities to get short once more.


Brent jumps after production deal

Brent Crude has gapped higher at the open of trade, following an agreement within non-OPEC producers to cut output. We are seeing price break to a new high currently, with the 15-minute chart giving us more clarity over early price action. This break means we have now seen a 16-month high, and a long-term inverse head and shoulders created, where the next major resistance level comes all the way up at $69.24.

While that does not mean we will go immediately there, it provides the basis for a potential bullish trending market for the near-term. As such, a bullish outlook is in place, with the continued creation of higher highs and higher lows the key to a trending market forming. As long as price remains above $56.73, then price should continue to rise.


WTI on the rise

Similarly, WTI has managed to gap higher at the open, with price continuing to rise. As long as we see price remain above the lows of $54.29, then further gains seem likely.

However, a move below that level could bring a gap close situation into play.


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