Technical analysis: key levels for gold and crude

Both oil and gold look bearish following recent gains, with the US dollar widely attributed as a cause of commodity weakness. However, will this continue?

Gold bars
Source: Bloomberg

Gold tests trendline resistance

Gold is gaining ground once more this morning, with price rallying into the same ascending trendline which underpinned the triangle pattern we were watching last week. As such, there is a good chance that the rally could be over for another move lower from here.

Whether that is the case or not, we would need to see an hourly close back above $1357 to get back into a bullish mindset and as such, any short-term rally is seen as a temporary move which will likely lead to another leg lower. 

Brent breaks support to bring bearish outlook

Brent broke below the crucial $49.66 support level yesterday, bringing with it the creation of lower lows alongside recent lower highs. This provides us with a bearish short-term view and points towards further losses.

With that in mind, the current rally looks likely to be short-lived. However, it is worth bearing in mind that price has bounced from the crucial $48.82 swing low and it makes sense for this hurdle to be overcome before being confident of further downside.

Ultimately we would need to see an hourly close back above $50.09 to negate this bearish view.

WTI selling off from previous support

WTI is selling off once more following a break the first swing low of $47.26. This morning has seen price rally back into this level and start to weaken once more.

With that in mind, we are clearly trending lower on the short-term and this is expected to continue unless we see an hourly close above the previous swing high. That is currently $48.14. Once price breaks below $46.65, then this will shift lower to $47.26.

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