Technical analysis: key levels for gold and crude

Gold punches higher, yet could we be seeing signs of an impending pullback? Meanwhile, crude continues to rise, as we approach a notable long-term trendline resistance.

Oil barrels
Source: Bloomberg

Gold rallies into trendline resistance

Gold has rallied sharply into trendline resistance over the past 24 hours, following a deep retracement that bottomed out on Monday. Crucially we have seen an ominous shooting star candle formed overnight, which when accompanied by a decreasing Moving Average Convergence Divergence (MACD) histogram and stochastic crossover, points towards a possible move lower from here.

Given the uptrend in place, such a pullback would likely be a short-term phenomenon before we move higher again. However, as long as the price remains below trendline resistance (currently $1280), it looks like we are set for a pullback. Should that come to fruition, it makes sense to look for the $1254-$1259 Fibonacci zone as a possible area to get long.

Gold price chart

WTI rally continues apace

WTI has continued its remarkably consistent ascent, with the price pushing into $54.00 this morning. This uptrend has shown precious little sign of slowing down of late, with the continued creation of higher lows and highs key to seeing this trend continue.

On this occasion, the most recent swing low is around $53.00. Unless we break below that level, bullish view remains. However, keep an eye on the long-term descending trendline resistance (currently $54.50) originating from mid-2015.

WTI price chart

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.