Technical analysis: key levels for gold and crude

Gold has been selling off, with Fibonacci needed to come into play or else we could see a wider bearish picture come about. Meanwhile, Brent upside could be fleeting amid a broader bearish trend.

Gold drops into Fibonacci support

Gold has dropped below trendline support and the 76.4% retracement of the rally from $1218.

Whether we should use the $1218 mark or $1216 for the Fibonacci drawing is arguable, and thus it is worthwhile noting the $1222 Fibonacci support that marks the low of the day thus far. As such, watch for whether we break below here, with a fall below the $1218 level providing a strong signal of further downside to come. Until then, watch for whether we respond to this Fibonacci support level or not.

Brent continues to grind higher

Brent has been gradually regaining ground over the past week, coming off the declines seen throughout the first three weeks of the month.

There is a strong chance of another push higher today, with Brent continuing the current short-term rebound. However, it is worthwhile noting that there is a strong chance that this is a retracement of the $80.49-$75.16 sell-off. As such, while a bullish short-term outlook remains, this would only translate into a wider bullish outlook if we break through $80.49. Until then, watch for Fibonacci resistance up ahead.

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