CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Technical analysis: key levels for gold and crude

Gold and Brent have been turning lower thanks to the dollar resurgence. Could this spark further downside or will we see a recovery for commodities?

IG Analyst

Publication date : 2017-03-01T10:03:14+0000

Oil pump

Source: Bloomberg

Gold falls into trendline confluence

Gold has tumbled lower once more overnight, with the price falling back into trendline support. Both ascending and descending trendlines have formed a confluence of support around $1242, which provides a potential area for bulls to come back.

Irrespective of whether we see these trendlines mark the bottom or not, as long as the price remains above $1226, another leg higher seems likely before long. With that in mind, look out for potential buying areas within the Fibonacci retracements.

Gold chart

Gold chart

Gold chart

Brent begins to turn lower once more

Brent managed to create the first intraday low in three weeks yesterday, following continued pressure on the top end of its $54.00-$57.46 range. Given that we saw a lower high precede this move, there is reason to believe we could see the price of Brent turn lower from the 76.4% retracement. So far, any rally into that area could be an interesting area for shorts.

However, a break back above $57.04 would point towards a move back into the $57.46 resistance. Given the continuous moves into that resistance level, the alternative is to look for shorts for a move back to $55.63, yet utilizing the $57.46 region for stops, thus reducing the risk/reward and improving the chances of being right.

Brent crude chart

Brent crude chart

Brent crude chart

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