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Technical analysis: key levels for gold and crude

Gold has managed to rebound into a crucial resistance level, while Brent is back at trendline resistance despite a host of bearish news stories.

IG Analyst

Publication date : 2018-06-14T09:55:31+0100

Oil pipes

Source: Bloomberg

Gold back at key resistance level

Gold has rebounded from another deep retracement, with the inability to break below $1289 absolutely key in determining the bias for this market. Unless that level was broken there was always a good chance of another bounce, which has ultimately played out.

This brings us back into the $1303 resistance level, which is going to be key for today’s trade. A break and hourly close above that level points towards a potential rally into the crucial $1307 mark, above which we would be looking at the possibility of a wider and more longstanding recovery. As such, watch the reaction to this $1303 level as a guide of whether we will remain within this short-term range, or break higher towards the $1307 resistance level.

Gold chart

Gold chart

Gold chart

Brent consolidating at trendline resistance

Brent has managed to remain relatively stable considering the host of bearish tones coming from the likes of Russia, who is seeking a return to pre-cut production levels.

However, the price has remained within this descending channel over the past week, and with it trading near the top end, a break through trendline resistance would be unlikely to last, with a wider descending trendline coming into play. With that in mind, both the short-term channel and wider pattern point towards a move lower in the near future. A break above $79.17 would ultimately negate this wider bearish trend seen over the past month.

Brent chart

Brent chart

Brent chart

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