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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.

Joshua Mahony JMahony_IG
Senior market analyst, London

2018-11-01T10:23:34+0000

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.

Gold chart

Gold chart

Gold chart

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.

Brent chart

Brent chart

Brent chart

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