Technical analysis: key levels for gold and crude
Gold and Brent diverge, as the safe haven aspect of gold sends it towards a key breakout level of resistance. Meanwhile, Brent has dropped towards a key support level.
Gold climbs towards key breakout level
Gold has been gaining ground amid the recent flight to safety and stock market weakness. The rise through $1219 was of particular importance yesterday, pointing towards further upside. However, for the bullish picture to hold longer lasting consequences, we would need to see a rally through the $1310 swing high.
With the price currently weakening around the 76.4% retracement at $1300, we could start seeing some selling pressure in the near term. However, a break below $1282 would provide us with a signal that the bullish pressure is set to ease.
Brent sell-off brings bearish picture back into play
A sharp decline in Brent yesterday brought about a fall below the $69.90 swing low, raising the chances of a wider bearish picture coming into play.
The head and shoulders formation seen throughout April is coming back into relevance, with the price of Brent having to overcome trendline support and the $69.14 level to bring about a renewed bearish outlook for the medium term.
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