Technical analysis: key levels for gold and crude

Both Gold and Brent confound the potential for a rebound, with both markets moving lower. 

Gold bars
Source: Bloomberg

Gold rally proves short-lived

Gold spiked higher yesterday, with a rebound into the 61.8% region. However, this looks to have been swiftly negated with price breaking back into the key support level of $1259.

That support zone will be crucial going forward as it represents a head and shoulders neckline. As such, watch out for a strong break of $1259 as a precursor to further losses. Conversely, we would need to break back through $1281 to become bullish once more.

Brent seeking to retrace following sell-off

Brent sold off once more yesterday, following a period of consolidation earlier in the week. We are seeing initial signs of strength coming back into play currently, which points towards another retracement.

With that in mind, keep an eye out for the Fibonacci levels as potential selling areas. However for the moment it seems likely we will see some short-term upside as we retrace some of yesterday’s sell-off.

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