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Technical analysis: key levels for gold and crude

Gold has decided to keep on rallying, but WTI continues to sink after another test of a key downtrend line. 

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Oil rig
Source: Bloomberg

Gold rally continues
The gold rally goes on, seemingly in ignorance of overbought conditions on a number of charts. While it may continue, the great distance between the price and the current rising trendline suggests a pullback is in the offing.

Dips towards $1130 may provide more attractive entry points for longs. So long as the price holds above the trendline, shorts are likely to find little traction. 

Brent appears to be consolidating
Further Brent attempts to get back above $36 yesterday were met with little success, and with the price back below the hourly trendline the price appears to be entering a consolidation phase. Any bounce back above $35 would need to move on and close above $36 to be considered firmly bullish.

A push below $33.14 would suggest that more weakness is in order, with a possible move to $32.12 and then on to $30.

WTI rallies favour sellers
Yesterday saw the WTI price hit the top end of the descending channel again. As a result, rallies here are likely to be the opportunity for further selling, with targets on the downside around $30.80, $30 and then the week’s low at $29.50. It would need a push above $33.50 to really change the outlook here. 

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