Technical analysis: key levels for gold and crude

Both gold and Brent rally, yet with recent downtrends intact, we could be about to see both turn lower before long.

Gold rings
Source: Bloomberg

Gold rally could come unstuck

Gold has rallied into the 76.4% retracement this week, in what looks like another pullback before we turn lower into the recent downtrend.

The key level to watch here is $1223, which is the difference between a bullish and bearish outlook. As long as we remain below that level, it is likely we will turn lower once more. Given the depth of this pullback, any shorts from here would provide a good risk-to-reward profile. 

Brent turning lower after hitting Fibonacci confluence

Brent is selling off once more this morning, following a move lower from a confluence of both the 76.4% (from Thursday’s swing high) and 61.8% (from July high) retracements.

An hourly close below $47.47 would signal the likeliness of further downside from here. However, we essentially need a break up through $49.23 to negate the bearish view that is currently in play.

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