Technical analysis: key levels for gold and crude

Gold is showing signs of a potential bullish reversal, while Brent prices are showing little signs of a rebound despite rumours of a major production cut from OPEC.

Oil rig
Source: Bloomberg

Gold turning higher from trendline and Fibonacci support

Gold is coming back into prominence following a fall into a support zone consisting of the 76.4% Fibonacci retracement and an ascending trendline.

The creation of higher highs and higher lows over the past three months points towards another leg upwards from here, with a wider bearish view coming into play with a drop below $1180.

Brent downtrend remains intact despite output cut talk

Brent has done little to respond to rumours of a 1.4 million barrels per day (bpd) cut from the Organisation of Petroleum Exporting Countries (OPEC) in a bid to counteract the recent weakness seen in oil prices. The downtrend remains intact, and it makes sense to expect more of the same until the price tells us otherwise.

With that in mind, keep an eye out for a potential next breakdown, with a rally through $72.00 required to negate this bearish outlook.

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