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Technical analysis: key levels for gold and crude

Gold has been declining further, amid a rising dollar and fears of a US-China trade war. Meanwhile, Brent is rebounding in anticipation of a tumultuous OPEC meeting on Friday. However, could both markets be about to reverse?

IG Analyst

Publication date : 2018-06-20T09:44:56+0100

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Gold continues decline, moving towards Fibonacci support

Gold has continued its decline, with the break below trendline support on Friday sparking a sharp deterioration in the price. On the wider timeframes, we have set higher lows since the turn of 2016.

Thus, there is a good chance we could see the buyers come back into play around the 76.4% retracement ($1267). With that in mind, further downside looks likely, with the reaction at $1267 crucial in determining whether we are set to start turning higher again or not.

Gold chart

Gold chart

Gold chart

Brent rallies into 61.8% resistance

Brent has managed to regain ground following a disagreement over whether we will see a rise in the Organisation of the Petroleum Exporting Countries (OPEC) production or not on Friday. This has taken us into the 61.8% retracement level, with the wider creation of lower highs and lower lows still in play.

This has been accompanied by a trendline, which has been breached on several occasions but could provide some form of additional resistance. Ultimately, there is still a good chance of another turn lower, given the trend over the past month, with a break above 7749 required to bring us back into a more bullish formation. With that in mind, watch for a potentially bearish shift from either the 7548 or 7625 Fibonacci resistance levels.

Brent chart

Brent chart

Brent chart

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