Technical analysis: key levels for gold and crude

Gold turns lower, but could the stochastic indicator highlight a possible bullish shift? Meanwhile, Brent continues to knock on the door at a hugely significant resistance zone.

IG Analyst

Publication date : 2017-10-26T10:26:22+0100

Oil barrels

Source: Bloomberg

Gold divergence could point towards bullish break

Gold is turning lower following a sharp rally yesterday, with the price passing the 76.4% retracement. We would need to see a break up through $1283 to negate the continued creation of lower highs and lower lows.

That being said, the stochastic indicator is providing a bullish divergence, with higher highs being indicated despite the lower lows currently in place on the price. Given that this comes after the market returned to the wider 76.4% retracement ($1271), there is a good chance we could start to see this market move higher from here. A rally above $1283 would be the safest way of saying such a move is happening.

Gold price chart

Gold price chart

Gold price chart

Brent continues to challenge key resistance

Brent remains stuck below the highly significant $58.48 resistance level this morning. This level is key to determining whether the recent upside is going to persist for a longer period.

Given the recent shift from lower highs and lows to higher highs and lows, there is a good chance we will finally see that bullish breakout. However, it may make sense to wait for a break or reversal around this crucial $58.48-58.93 resistance region. A break back below $56.96 would point towards a bearish reversal from this area.

Oil price chart

Oil price chart

Oil price chart

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