Technical analysis: key levels for gold and crude

Gold has managed to rebound into a crucial resistance level, while Brent is back at trendline resistance despite a host of bearish news stories.

Oil pipes
Source: Bloomberg

Gold back at key resistance level

Gold has rebounded from another deep retracement, with the inability to break below $1289 absolutely key in determining the bias for this market. Unless that level was broken there was always a good chance of another bounce, which has ultimately played out.

This brings us back into the $1303 resistance level, which is going to be key for today’s trade. A break and hourly close above that level points towards a potential rally into the crucial $1307 mark, above which we would be looking at the possibility of a wider and more longstanding recovery. As such, watch the reaction to this $1303 level as a guide of whether we will remain within this short-term range, or break higher towards the $1307 resistance level.

Brent consolidating at trendline resistance

Brent has managed to remain relatively stable considering the host of bearish tones coming from the likes of Russia, who is seeking a return to pre-cut production levels.

However, the price has remained within this descending channel over the past week, and with it trading near the top end, a break through trendline resistance would be unlikely to last, with a wider descending trendline coming into play. With that in mind, both the short-term channel and wider pattern point towards a move lower in the near future. A break above $79.17 would ultimately negate this wider bearish trend seen over the past month. 

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