Technical analysis: key levels for gold and crude

Gold has begun the new week in the same negative fashion that it ended last week. Meanwhile, oil prices are holding steady even as Iran begins shipping oil. 

Oil rig
Source: Bloomberg

Gold could retake highs of $1260

The rather ugly unwind in long gold positions goes on. Having being so heavily overbought, gold has now switched (at least on intraday charts) to being oversold.

As a result, we could see a bounce back towards $1220, at which point the situation should be reassessed.

If the price then turns lower once more, it is a sign that the 200-hour simple moving average at $1182 may be tested, and then on towards the rising hourly trendline at $1160.

A move back through the 50-hour SMA ($1232) is the key to any attempt at retaking the highs of last week around $1260.

Brent eyes $32.24

Having firmly defended the $30 level last week, the price has now pushed through the 2-3 February lows around $32.24.

Although the price is now pulling back from the overnight high, some support may be found around $32.24, which would allow us the chance to contemplate a rally to the late January peak around $36, which regular readers will remember is key support from December of 2015.

A drop below $32 brings another test of $30 into focus for Brent.

WTI could see 25 January peak

Activity should be relatively limited today, but in any case the first order of business for bulls is to break the inside trendline currently around $29.50.

A break above here heads towards the top end of the ongoing daily descending channel at $31.90, and from there on to $32.72, the 25 January peak.

Any move lower for WTI is likely to encounter support at $27.74 and then on to $26.05. 

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