Technical analysis: key levels for gold and crude

The gold pullback continues, yet will a major trendline come to its rescue? Meanwhile, crude remains in an uptrend, with another leg higher likely.

Worker checking oil barrels
Source: Bloomberg

Gold pulls back to trendline support
The weakness seen in gold over recent days was unexpected given the look of a bullish triangle breakout in play. However, the sell-off has taken us back to trendline support which is currently around $1240.

Yesterday saw price action fall down towards this level and rally heavily. Thus another move lower would be looking at $1240 as an important level of support.

Alternately, an hourly close candle above $1259 would signal a more bullish outlook, with resistance levels at $1263, $1273 and $1280 in view. 

US crude rolling over once more?
US crude managed to tentatively break back above the Tuesday high of $39.46 yesterday, following a very deep retracement to $37.23. Crucially, the uptrend remains intact owing to the higher low and high.

We are seeing some hesitancy to break through the $39.46 level and thus another leg higher would be expected in the event of an hourly close above that resistance level.

To the downside, an hourly close below $38.65 would be required for evidence of a deeper retracement, with $37.86 the next key support level.

Brent fails to make new highs
Interestingly, Brent crude has failed to retake the highs of $41.65 and thus a closed hourly candle above that level would bring about a bullish view. It makes sense to await a bullish signal from both Brent and US crude should they start to break higher.

However, to the downside, an hourly close below $40.69 would bring expectations of a deeper retracement, with $40.37 the next support level.

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