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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 looks set for further downside after a break below key support within a period of consolidation. Meanwhile, Brent continues to consolidate following a breakout. 

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Gold tracking trendline after decline below key support

Gold managed to break below the $1320 support level yesterday, providing greater confidence that we will return to the lower half of the multi-month range in place for gold.

For the time being, the price is tracking a descending trendline, which forms the lower boundary of a falling wedge pattern. This points towards a potential wider retracement coming into play before long. However, until we break above the $1326 level to signal the beginning of that retracement, another leg lower towards the crucial $1306 level looks likely before long.

Brent continues to consolidate after breakout

Brent remains in consolidation mode following on from its breakout into a three-year high last week. We are seeing the price falter around the same $74.26 level respected last Thursday, bringing about the potential for an intraday head and shoulders formation.

However, unless we see a break below $70.47, any such short-term downside would be seen as a buying opportunity. As such, it makes sense to look for long positions either on the breakout through $74.77 or at a Fibonacci within a retracement of the $70.47-$74.77 rally. 

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