Technical analysis: key levels for gold and crude

Gold shows signs of a bullish reversal following on from its recent demise. Meanwhile, crude looks set for a strong end to the week, with price breaking higher from a triangle pattern.

Oil barrels
Source: Bloomberg

Gold showing tentative signs of a resurgence

Gold has rallied into the $1265 resistance level this week, providing a new higher high. This points towards the market possibly reversing some of the losses seen earlier in the month.

For now, an hourly close above $1265 could provide a bullish signal, whereas a move lower would look like a retracement and precursor to another move higher. As such, look out for any retracement to bounce within the 61.8%-76.4% retracement region.

This bullish outlook remains unless we see an hourly close below $1246.

Gold price chart

Brent breaking higher from triangle

Brent has broken through trendline resistance overnight, providing clues that we could see a rally back towards the $53.95 high set last Monday.

Given this breakout, any retracement would be seen as a buying opportunity, as long as we do not see an hourly close below $51.71.

Brent crude price chart

WTI approaches key resistance after trendline break

WTI is also breaking out for a symmetrical triangle pattern, with price pushing on towards the first swing high of $51.44. The ability to break through $51.44 is key to providing a bullish signal. Should we see WTI break through that resistance level, we would have confirmation of the bullish breakout across both markets.

That said, given the distance between the breakout level and the previous high on Brent is significantly larger than WTI, it makes sense to trade Brent for the expected rally. A bullish view is in play unless we see an hourly close below $50.12.

WTI crude price chart

IGA, may distribute information/research produced by its respective foreign affiliates 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.