Gold and Brent crude face key Fibonacci hurdles
Gold and Brent crude have both rallied towards key 76.4% Fibonacci levels, with the reaction providing a vital clue on where we go from here.
Gold rallies up to Fibonacci resistance
Gold has managed to gain a substantial amount of ground over the course of the past two months, with price approaching the key 76.4% Fibonacci resistance level. That level highlights the fact that gold remains within a wider bearish pattern over the course of the past nine months. A break up through that $1892 level would bring greater confidence that we will continue this recent uptrend. With price consolidating below that level, the potential breakout from this holding pattern will be key. As such, the break through either $1892 (bullish) or $1852 (bearish) would provide a better idea of where we go from here.
Brent crude at risk after rally into Fibonacci resistance
Brent crude has been clawing back lost ground over the course of Friday and Monday, with price rising back towards the $70 level. Unfortunately, we have seen price attempt to break through $70 on a number of occasions throughout May, each of which has been unsuccessful. Given the recent breakout from an ascending channel, there is a good chance this current rally is going to fail once again. With that in mind, the 76.4% Fibonacci resistance level at $68.71 looks like a good reversal point for this market. Consequently, a bearish view holds unless price break through the $70 handle.
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