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Technical analysis: key levels for gold and crude

Gold’s resurgence has brought us back into a crucial resistance level, while Brent’s recent rebound could bring us another shorting opportunity.

Joshua Mahony JMahony_IG
Senior Market Analyst, London

Publication date : 2018-11-30T09:52:46+0000

Gold

Source: Bloomberg

Gold consolidates below key resistance level

Gold has been moving sharply higher over the second half of the week, with the wider bullish trend seen over the past three months coming into play once more.

A break through the $1230 mark would provide a signal that the weakness we have been seeing over the first two weeks of November are over. Such a move would point towards a likely rally up through the $1237 and $1247 resistance levels. However, for the moment we need to watch for whether that level is broken or not, with a break below yesterday’s low of $1222 providing a bearish short-term view.

Gold chart

Gold chart

Gold chart

Brent rallies after minimal break lower yesterday

Brent managed to break into a new low yesterday, following yet another retracement. However, the failure to really gain any traction in that move meant that we subsequently started moving higher soon after.

That being said, we still remain within a downtrend, with a move above $61.50 required to negate the creation of lower highs. As such, another bearish reversal is certainly a possibility from here, with the respect of the 76.4% Fibonacci level pointing towards a downward move to come. As such, shorts are preferred unless we see a break through the $61.50 swing high.

Brent chart

Brent chart

Brent chart

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