Brent crude and gold prices on the rise as lumber falls towards key support
Brent crude and gold have enjoyed a strong 24-hour period following the FOMC meeting. However, lumber continues to lose ground as it heads towards a key support level.
Gold rallies into key resistance zone
Gold has been on the rise over the course of the past 24-hours, with price pushing into a fresh two-week high thanks to Federal Reserver chair, Jerome Powell’s commentary that eased expectations over future rate hikes.
The break through Friday’s high of $1739 signalled a fresh leg higher coming into play. However, that takes us up into the notable $1745 level, which is worthwhile watching as a near-term hurdle.
While this recent push through the $1739 level does point towards a potential move higher here, it is worthwhile noting that we also have trendline resistance up ahead if $1745 is taken out.
It does look likely that we will see further upside from here, but the wider trend coupled with an ascending trendline highlight the possibility that the bears will come back into play before long.
Brent crude rises into confluence of trendline resistance
Brent crude has been on the front foot over the course of the week thus far, with price rising through the $103 mark once again. Crucially, this has taken price into an interesting confluence of two trendlines, which could hinder upside over the near-term if not broken.
Given the fact that we have seen price struggle to break through the $104 region of late, traders should therefore be aware of the potential for a bearish turn around this confluence of trendlines.
Should price manage to overcome these lines, we would need to see a push through the $104.42 and $106.25 levels to provide greater confidence that the downtrend has come to an end.
Until then, there is a risk that we continue the trend by rolling over around these levels.
Lumber falls back towards critical support level
Lumber has suffered significant losses over the course of the past three weeks, with price falling back towards the key $523.24 support level.
A break below that point would provide a bearish continuation signal for lumber, signalling that the recent upside move was merely another retracement within a wider downtrend.
However, it is worth noting that from a wider perspective, we have seen this market bottom out at $460 in both 2021 and 2020. Thus, while we could see price fall back into the $460 region should price break $523, traders should keep a close eye out for any potential reversal signals around that key long-term support level.
For now, watch for either a break or a reversal pattern around the $523 mark to guide near-term price action.
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