All trading involves risk. Losses can exceed deposits.

Technical analysis: key levels for gold and crude

Gold punches higher, yet could we be seeing signs of an impending pullback? Meanwhile, crude continues to rise, as we approach a notable long-term trendline resistance.

All trading involves risk. Losses can exceed deposits.
Oil barrels
Source: Bloomberg

Gold rallies into trendline resistance

Gold has rallied sharply into trendline resistance over the past 24 hours, following a deep retracement that bottomed out on Monday. Crucially we have seen an ominous shooting star candle formed overnight, which when accompanied by a decreasing Moving Average Convergence Divergence (MACD) histogram and stochastic crossover, points towards a possible move lower from here.

Given the uptrend in place, such a pullback would likely be a short-term phenomenon before we move higher again. However, as long as the price remains below trendline resistance (currently $1280), it looks like we are set for a pullback. Should that come to fruition, it makes sense to look for the $1254-$1259 Fibonacci zone as a possible area to get long.

WTI rally continues apace

WTI has continued its remarkably consistent ascent, with the price pushing into $54.00 this morning. This uptrend has shown precious little sign of slowing down of late, with the continued creation of higher lows and highs key to seeing this trend continue.

On this occasion, the most recent swing low is around $53.00. Unless we break below that level, bullish view remains. However, keep an eye on the long-term descending trendline resistance (currently $54.50) originating from mid-2015.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.