Gold price and Brent crude price likely to rise despite recent weakness
Gold and Brent crude weaken, yet wider uptrend points towards likely move higher before long.
Gold collapses into confluence of support
Spot Gold saw a rapid decline yesterday, with the precious metal having dropped a total of 10% from the recent record high of $2075. Nevertheless, this looks to be a case of the retracement being so big because the initial rally seen over the past month was so impressive. Price has since started to rise once more from a confluence of support, with the 200-SMA, ascending trendline, an 76.4% Fibonacci level all converging to create a crucial support zone. With price turning higher from that level, there is a good chance we start seeing the bulls coming back into play from here. Watch out for a breakthrough the $1929 level to bring an intraday higher high. We are also seeing the stochastic break through the 20 threshold, which has provided a good buying opportunity on the past two-occasions. To the downside, we ultimately need to break through the $1790 level to negate the current wider uptrend that remains in play.
Brent consolidating within uptrend
Oil - Brent Crude failed to break through the $46.30 peak yesterday, with price instead weakening into another higher low. While this does maintain the bullish trend of higher lows, it also points towards a period of consolidation here. As such, while the wider uptrend points towards further gains, a break through either $44.38 (bearish) or $45.96 (bullish) would bring another signal of impending short-term direction.
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