Technical analysis: key levels for gold and crude

The WTI recovery continues to push higher, despite little chance of a production deal. Equally surprising, gold is managing to break higher amid a clear risk-on sentiment shift.

Gold bars
Source: Bloomberg

Gold spikes from trendline support
After the bulls managed to turn out some positive price-action despite gains across risk assets, gold is finally back up above Monday’s open. We now have a higher-high and higher-low in play on the short timeframes, which provides a good chance of further gains.

We are seeing gold drift lower currently and it seems a better idea to be bullish on a pullback rather than entering any positions within an extended market. As such, Fibonacci retracements will be interesting as potential support should we see further pullback.

In particular, the 38.2% ($1239), 50% ($1237) and 61.8% ($1235) levels are worth watching out for. This bullish view would be negated with an hourly close below $1227.

WTI rally reaches swing high
After an incredible recovery from initial 7% losses yesterday, WTI managed to reach the first swing high ($41.82) this morning. We are seeing a remarkably consistent recovery in play here, which is expected to persist with the next major resistance levels coming around $42.28 and $43.42. This bullish view would be negated with a move back below $40.85.

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