Technical analysis: key levels for gold and crude

Gold and Brent have sold off within wider periods of upside. However, with those bullish trends still intact, there is reason to believe this is a good buying opportunity.

Gold pullback brings buying opportunity

Gold has declined into trendline support this week, with consolidation giving way to another leg lower yesterday.

Interestingly, while we now create lower highs and lower lows, this is likely an ABC style retracement, with the bullish trend expected to come back into play from here. A break through $1330 adds greater confidence to such a bullish resurgence.

Brent falls back to trendline support

Brent has declined through the night, bringing the price back into trendline support. The wider uptrend has come under pressure after a sharp decline in Friday, yet with a confluence of trendline support coming into play on Tuesday morning, there is a good chance we are seeing another charge towards the recent high of $67.82.

Given the short-term pullback we have seen here, we are looking for trendline support to hold up as a precursor to further gains. With the stochastic oscillator heavily oversold, it could make sense to look for a break up through the 20 mark once again to provide a buy signal. Alternately, a break below the $65.41 level would signal a possible bearish phase taking hold once more.

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