Technical analysis: key levels for gold and crude

Gold looks likely to turn higher following a deep retracement, while Brent has begun to sell-off once more following a wedge breakdown.

Gold retracement brings buying opportunity

Gold has pulled back into Fibonacci support, providing a potential buying opportunity for a rally towards the second half of the week. The decision on whether to use the $1317 swing low or wider $1307 level is a case of risk appetite.

Interestingly, we can see the 76.4% of the shorter move coincide with the 61.8% of the wider move. Both of which have been hit. As such, it is likely we will begin to turn higher in line with the wider bullish trend in place for gold. A break below $1307 would negate this bullish outlook.

Brent wedge points towards further downside

Brent broke lower from a rising wedge formation, providing a bearish signal after falling below the first swing low of $64.79.

The subsequent deep retracement gave a great short entry opportunity, with the price falling since. This pullback is likely to persist, even if it is just a retracement of the wider $61.66-$65.69 rally.  Watch out for a rally up above $65.69 to negate this short-term bearish view.

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