Technical analysis: key levels for gold and crude

Gold gains appear to have hit the buffers, with a double top being posted from major resistance. However, the crude downtrend remains intact despite overnight gains.

Smelted gold
Source: Bloomberg

Gold double top points to weakness

Gold has managed to complete a double top formation this morning, following on from a rally into the crucial $1307 resistance level. This is certainly the kind of area where we could see a response and that is exactly what appears to be happening.

Given this double top formation, further downside seems likely from here, with an hourly close above $1307 required to point towards further gains. 

Brent regains ground, yet downtrend remains

Brent has managed to gain some ground overnight, following on from an extremely deep retracement past the 76.4% retracement. With that in mind, a break below $45.35 would point towards a break into a more bearish picture over the longer-term.

However, for the short-term, any rally looks like a short-term retracement within an intraday downtrend, with Fibonacci resistance worth watching out for. We would need to see an hourly close above $49.29 to negate the recent downtrend.

Until then, the downtrend is expected to resume.

WTI rally unlikely to last

WTI has similarly gained ground overnight, set within a clear short-term downtrend. This trend is expected to continue apace unless we see price post an hourly close above $47.59.

Should that occur, we would be looking for a possible bullish scenario. However, until that happens, another leg lower seems the likeliest scenario.

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