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Technical analysis: key levels for gold and crude

Gold prices continue to tumble, yet with Fibonacci support in play, will we see a recovery? Meanwhile Brent needs to recover quickly, or else things could start to turn ugly.

IG Analyst

Publication date : 2017-05-03T10:07:24+0100

Gold bar

Source: Bloomberg

Gold downtrend runs into crucial Fibonacci support

Gold is selling off once more this morning, in a continuation of the downtrend seen since topping off at trendline resistance last month. However, with 2017 having exhibited a wider uptrend thus far, we would need to break below the $1240 swing low to negate the view that we could turn higher before long.

With that in mind, it is notable that we are currently trading around the 76.4% retracement. There is also reason to believe we could turn higher from here. However, for greater confirmation of a bullish reversal, we would need an hourly close above this morning’s swing higher of $1257. Until then, the short-term downtrend remains intact.

Gold

Gold

Gold

Brent channeling towards critical support level

Brent’s attempt to rally yesterday fell afoul of trendline resistance once more, with the market selling off sharply as a result. Crucially, we saw that move lower take us within striking distance of the absolutely critical $49.92 support level.

The subsequent rebound seems to have been stifled around the April low of $51.01, with price drifting lower since. Crucially we are either going to break below $49.92 to bring a strong bearish signal for the medium term, or else an hourly close above $52.18 to portray a short-term bullish recovery.

Brent

Brent

Brent

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