Technical analysis: key levels for gold and crude

Gold pulls back moderately from trendline resistance as we await another push higher, while crude prices look likely to tumble once more despite early gains today.

Oil plant
Source: Bloomberg

Will the gold resurgence reappear?
Gold has been selling off this week, just as the indices start to rally. This inverse relationship shows gold is starting to take on its safe haven status once more. Looking at the hourly chart, there is a clear trendline resistance in play here and this is likely to be crucial for the future outlook for the week.

There is a clear simple moving average (SMA) convergence support, with both the 50 and 200-hour SMA converging at the $1089 December high. All of which seem to have provided support to trade this morning.

Ultimately, the outlook will be determined by a break and closed hourly candle above $1095, which would provide a good indication that further upside is likely. Conversely, for a bearish view to come through, a move back below $1079 would be required.

Resistance levels of note are $1092, $1095, $1098 and $1108. Support levels to watch are at $1089, $1085, $1079 and $1077.

US crude looks set for further downside
US crude has come back into contact with the 50-hour SMA, which has provided us with a strong and consistent resistance indicator over the past week. Given the downtrend in play, alongside the reliability of the 50-hour SMA, further downside seems likely from here.

A closed hourly candle below $31 would give better confidence this selloff is about to occur. We would need to see a closed hourly candle above $32.46 to weaken this bearish view. Resistance levels of note are at $32.00, $32.46 and $32.82, with support at $31.24 and $30.74.

Brent likely to sell off once more
Brent has been rallying this morning, following another sharp selloff instigated late into yesterday’s European session. However, with price coming into the $30.50 resistance level, we have already seen this rally start to fade some of those gains.

Generally, the strongest rally takes us back up to the 50-hour SMA and any further upside would be likely to be capped at SMA and trendline resistance. Thus, the bearish view remains unless we see an hourly close above $31.84.

Resistance levels of note are $30.50, $30.74, trendline resistance and $31.84. Meanwhile support levels are hard to come by given the multiyear lows being created. Thus watch for the $29.71 overnight low and any big whole numbers thereafter. 

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