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Technical analysis: key levels for gold and crude

Both gold and Brent are beginning to show signs of weakness, despite recent trends. 

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Gold attempts to recover from overnight losses

Gold sold off sharply overnight, with the price hitting $1325 for the first time this week. The sharp nature of that decline has now given way to a period of consolidation, which looks likely to provide a short-term retracement towards the upside.

With that in mind, the downtrend remains intact, yet there is a strong chance of a move back to the upside, in order to retrace the $1340-1324 sell-off. That being said, this short-term bearish trend would only be negated with a break back above $1340. Until then, a short-term bounce would be seen as a precursor to further losses, and a fall back below $1324.

Brent begins to show signs of weakness from $70.00

Brent has struggled to clear the $70.00 handle this week, with the price turning lower after Monday’s attempt to break to the upside.

The key level to watch here is $68.40, where an hourly close below that level would complete a head and shoulders formation, providing a bearish outlook for Brent. With that in mind, watch for a break above $70.00 (bullish), or below $68.40 (bearish) to provide a directional bias for this market. 

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