Technical analysis: key levels for gold and crude

Commodities looking relatively choppy after a volatile day yesterday across crude and gold markets. 

Silver bars
Source: Bloomberg

Gold choppy amid lack of direction

Gold looks a difficult market today, with price seeing major volatility in either direction yesterday. However, for now we are seeing a symmetrical triangle in play, which could give us some direction.

Bear in mind that the lack of trend coming into this pattern means the breakout is somewhat less reliable.

A close below $1069 would point towards a bearish outlook, with $1066 the next support level, while a closed hourly candle above $1077 would point towards a bullish session, with $1081, $1085 and $1089 the next resistance levels. 

Gold

US Crude settling following volatile day

Yesterday’s US Crude inventories data provided oil traders with big volatility yesterday. However, the fact that a big drawdown in crude reserves ultimately led to losses was a warning sign that perhaps the selling is not over.

This morning has seen price regain the $38.41 level and is currently utilising it as support. Ultimately, we could see this level being used as a base to project higher, but the overall outlook is one of uncertainty.

Thus it makes sense to await the resolution, where a closed hourly candle above $39.84 is pointing towards a bullish outlook, while a close below $37.70 looks to continue the losses.

Resistance levels of note are $40.28, $40.57 and $41.27, while support levels are $37.70 and $37.63.

US Crude

Brent trending lower

Brent seems to have more direction than US crude, with a clear downtrend still in play.

Price is currently finding resistance on the 50-hour simple moving average, but the key resistance level of note is $41.75, which a close above would point towards a more bullish outlook.

Until that happens, further losses are likely, with support levels of $40.12 and $39.75 in sight, below which we would have to look at multi-year levels which can have less validity.

Brent

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