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Technical analysis: key levels for gold and crude

Recent weakness for both gold and Brent has provided potential buying opportunities, with upside expected from here.

IG Analyst

Publication date : 2017-11-21T09:51:49+0000

Gold

Source: Bloomberg

Sharp sell-off in gold brings us back to key support

Gold dropped sharply yesterday, with the price moving back into the initial swing low of $1275. This is accompanied by the wider 76.4% retracement, and as such we have greater importance attached to that region.

With that in mind, there is a good chance we could see the price move higher from here, where a break back below $1275 would be a warning sign that this recent bullish reversal may be coming undone. Ultimately, we would need to see a break below $1270 to add greater confidence that this is the case. Until then, a bullish push higher is still a strong possibility.

Gold price chart

Gold price chart

Gold price chart

Brent turning higher after yet another 76.4% retracement

Brent is turning higher once more, following on from yesterday’s 76.4% retracement. This came off the back of a double bottom formation which had its low at the wider 76.4% retracement.

Therefore, we have the potential for both a wider and shorter term 76.4% retracement trade playing out for this market, should we continue to move higher from here. That is expected to be the case, with a break up above $62.80 likely in the near term. From a wider perspective, a bullish outlook remains valid unless we see a break back below $60.00.

Oil price chart

Oil price chart

Oil price chart

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