Technical analysis: key levels for gold and crude

Gold and WTI have both managed to break out of a consolidation phase, with the wider bearish trend coming back into play.

Source: Bloomberg

Gold confirms bearish continuation

Gold managed to break out of its recent consolidation phase yesterday, with the price falling into a 16-month low. The break below $1205 is also important as that level represents the major low from July 2017.

However, most crucially, we have also moved away from the idea that we were gearing up for a period of upside following the break below the crucial $1236 double top neckline. With that in mind, the downside looks likely to continue, with any upside looking like an opportunity to sell gold. This bearish view holds unless we break above $1236 resistance.

WTI rallies into Fibonacci resistance

WTI finally managed to break lower from its recent gradual ascent, with the drop below $68.02 bringing about a renewed bearish short-term view.

This means that the rally seen yesterday is likely to be a retracement before we turn lower once more. The respect at the 61.8% level highlights the potential for that bearish move to come into play today. As such, further downslide looks likely from here unless we see a break through $70.00 resistance.

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.

Find articles by writer

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.