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Technical analysis: key levels for gold and crude

Gold consolidation looks likely to reverse towards the upside, while Brent gains expected to extend once more.

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Gold showing signs of potential reversal

Gold has been consolidating around the confluence of trendline and 61.4% Fibonacci support, coming off the back of a drop below the notable $1303 level. Looking at recent price action, we are seeing a host of indecision candles with long, lower shadows.

With the wider trend showing higher lows since the beginning of 2016, there is a strong chance this current short-term period of downside was going to turn higher once more, rather than break below $1236. As such, watch for a potential bounce from here, where a break below the $1280 low from yesterday would negate hopes of a bounce from this level.

Brent moves higher following retracement

Brent is moving higher once more, with the retracement seen throughout the end of last week being left in the rear-view mirror as the price pushes on towards the $80.44 high from Thursday.

The continued creation of higher highs and higher lows points towards a short-term trend, which continues to push onwards. As such, a bullish outlook remains in place, as long as we remain above the most recent low of $77.60.

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