Gold improves, while Brent turns lower from resistance
Gold attempts to regain ground, following a Fibonacci retracement, while Brent crude looks primed for a potential move lower.
Gold turning higher after Fibonacci retracement
Gold has been attempting to regain ground after a retracement into the 76.4% Fibonacci retracement level of $1887. For once we are not seeing gold reverse lower at the same time as the wider markets tumble. The question over whether this is simply an upward retracement remains, with the slump towards the end of September providing the potential for a bearish turn from the $1926-1944 resistance zone. Nevertheless, as things stand there is a chance we could see things improve once again over the short-term with a rally back into that resistance zone looking likely. A break through the $1913 level would confirm that bullish short-term view.
Brent crude starts to weaken from key resistance
Brent crude has managed to rally back into the $43.71 level, which represents both the high of last week and the 61.8% Fibonacci resistance level. From a wider perspective, the declines seen at the beginning of September continue to weigh on this market, having marked an end to a multi-month uptrend. Thus, there is a good chance we see another downside move here, with a break through $43.71 required to negate that view. To the downside, the recent trend of higher lows does point towards the potential that this current move lower is a short-term retracement. As such, a break below the $41.58 level would be required to bring about a wider bearish outlook.
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