Technical analysis: key levels for gold and crude

Gold and WTI diverge, with gold continuing to drift lower, while WTI breaks through a crucial resistance level. This should provide us with a period of upside for crude over the short term.

Gold continues to drift lower

Gold never really managed to hold above $1208 when attempting to break higher from the recent wedge formation, with the price turning lower yet again this week.

The break below the recent lows points towards a possible drop into trendline support. There is still a chance we are seeing a retracement here, with a break below $1183 required to signal the beginning of another turn lower for gold. Until then, watch to see if the 76.4% retracement ($1190) is respected for a potential turn higher. Ultimately, we would need to see a break and closed candle above the $1204 swing high to negate the current short-term period of downside.

WTI breaks through crucial resistance zone

WTI has managed to follow up on the recent tentative break through $70.00, with another push higher that has now firmly broken free from the downtrend in play throughout July.

This rebound seems to have originated from trendline and horizontal support rather than a Fibonacci level. Now that we have pushed through $70.34, there is a good chance that the short-term picture is going to be a relatively consistent upside for WTI. A break below the $69.34 swing low is required to negate this bullish short-term view.

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