Technical analysis: key levels for gold and crude
Gold weakness could provide us with a buying opportunity, while Brent is heading back towards a crucial bullish breakout level.
Gold pullback to bring buying opportunity
Gold has continued to move lower, with the break below $1308 pointing towards a deeper retracement coming into play. However, this does seem like a retracement, and this period of weakness looks to provide us with a buying opportunity.
We have not yet seen a particularly deep retracement, yet with further downside comes the possibility of buying gold around the 61.8% and 76.4% retracement levels ($1296-$1288). Only with a break below $1277 would we be looking at this sell-off as a bearish reversal rather than a retracement.
Brent regaining ground towards key breakout level
Brent turned lower from the crucial $63.75 resistance level on Monday, yet with the price failing to fall below the key breakdown level of $60.45, it looks like we are heading back into that bullish breakout level.
The ability to break through $63.75 is going to be key in determining whether we continue the recent uptrend or not. Should we break and hold above there, it would complete a wider inverse head and shoulders formation and pave the way for further upside. For a bearish picture to emerge, we would need to see a break below the $60.45 level.
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