Technical analysis: key levels for gold and crude

Gold and WTI have both managed to break out of a consolidation phase, with the wider bearish trend coming back into play.

Source: Bloomberg

Gold confirms bearish continuation

Gold managed to break out of its recent consolidation phase yesterday, with the price falling into a 16-month low. The break below $1205 is also important as that level represents the major low from July 2017.

However, most crucially, we have also moved away from the idea that we were gearing up for a period of upside following the break below the crucial $1236 double top neckline. With that in mind, the downside looks likely to continue, with any upside looking like an opportunity to sell gold. This bearish view holds unless we break above $1236 resistance.

WTI rallies into Fibonacci resistance

WTI finally managed to break lower from its recent gradual ascent, with the drop below $68.02 bringing about a renewed bearish short-term view.

This means that the rally seen yesterday is likely to be a retracement before we turn lower once more. The respect at the 61.8% level highlights the potential for that bearish move to come into play today. As such, further downslide looks likely from here unless we see a break through $70.00 resistance.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IG Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by writer