Technical analysis: key levels for gold and crude

Oil prices may look poised to break higher, but there is still work for buyers to do to end the recent run of losses.

Oil pipework refinery
Source: Bloomberg

Gold lacks upward momentum
The bounce off the 50-day simple moving average ($1217) yesterday helped to steady the situation for gold, but upward momentum is lacking today. As at the end of March, yesterday saw the price unable to move on beyond $1235.

A drop today and tomorrow may find support around $1210, the lows from 28 March and 1 April, and then below this to $1190. A bounce needs to clear $1235, to then target $1245 and $1260.

Brent continues downtrend
The price has rallied impressively off the lows, but a failure to push through $39 would signify that the downtrend is continuing for Brent. Even if it does recover $39, downward sloping resistance from the high of late March is still present, which would suggest a move back to $40 before a turn lower. Below yesterday’s low of $37.20, the price is likely to retrace in the direction of $34.88 and the third weekly pivot support level.

WTI aims to push higher
On 4 April the bounce in WTI failed to hold above $37, so buyers need to push on above here and quickly, to avoid the possibility of a move back towards $35.20, and then on towards $34.30 and $31.97. If the price does break higher, then the first target is $38, and from here on towards $40, where resistance was found on 28 and 30 March. 

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