Technical analysis: key levels for gold and crude

Commodities are on the rise this week, with gold and crude performing well amid a weak dollar story. This morning is seeing a pullback, but this looks more like a retracement than a reversal. 

Oil refinery plant
Source: Bloomberg

Gold takes a breather
The commodity has enjoyed a great week, which was all sparked by the weak payrolls number on Friday. Yesterday saw another strong leg higher, which has slowed into consolidation.

As such, it makes sense to either trade a short-term pullback, await a decent pullback to a deep Fibonacci, or else await an hourly close back above yesterday’s high of $1266. 

Brent retraces within uptrend
Brent crude is also seeing early losses today, in what clearly looks like a retracement rather than a top. The market has reached a new seven-month high this week and as such, it was always likely to take a breather at some point.

It therefore makes sense to buy into dips, with a closed hourly candle below the recent swing lows of $51.96 and particularly $51.45 providing the warning sign of a potential short-term trend shift. 

US crude retracement unlikely to last
WTI is also pulling back this morning, following on from a strong rally of late. This retracement seems likely to result in another move higher and, thus, the bullish view remains in play, with the 61.8% ($51.42) and 76.4% ($51.28) Fibonacci retracements representing interesting near-term support levels. This bullish view would come into question with an hourly close below $51.05.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.