Technical analysis: key levels for gold and crude

Gold and Brent head in opposite directions despite the recent convergence, with gold rebounding from the $1214 support zone, while Brent continues its decline after respecting trendline resistance.

Gold rebounds from $1214 support zone

Gold managed to break below the $1218 mark earlier in the week, providing a heightened chance of further downside to come.

However, with the confluence of support around the $1214 mark, we have seen a rebound come into play from a cluster of previous resistance levels. The prior sell-off points to this current rally likely being a retracement, yet with further upside coming into play, the short-term picture looks more positive for now.

Brent falls into Fibonacci support

Brent has been declining once more, after respecting trendline resistance. That trend has taken us into the 76.4% Fibonacci retracement, at which point we have to question whether we are seeing a market reversal here or a retracement within a long-term uptrend.

A break below $70.49 would answer that question for us, as it would negate the wider creation of higher lows. However, until then there is a chance we could rebound, with the reaction to this Fibonacci support providing us with one indication of whether markets perceive this as a retracement or a reversal.

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