Technical analysis: key levels for gold and crude

Crude rally calms down after an impressive start to the week. Meanwhile, gold has created a head and shoulders pattern, pointing towards further losses.

Oil rig
Source: Bloomberg

Head and shoulders pattern for gold
​Gold broke lower yesterday, providing a projected target of $1243 (last week’s high). As such, further downside seems likely, unless we see an hourly close above $1259.

Any rally into the neckline and 50% retracement at $1253 would be seen as a likely area for another turn lower towards that $1243 level. 

WTI eases back after rally
Fuelled by rumours of a production freeze agreement between Russia and Saudi Arabia, WTI broke higher in style yesterday. Overnight we have seen a pull back, with short term lows and lower highs being created.

It is likely to be simply a retracement rather than a top, yet we would need to see an hourly close above $42.96 for a renewed bullish view. Until then we could drift lower once more, with support levels of note at $42.03 and $41.67.

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