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Technical analysis: key levels for gold and crude

Commodities are on the rise, with gold and crude both gaining ground recently, but how long will it last?

Oil pump
Source: Bloomberg

Gold continues to charge towards $1200

Gold has been moving higher in a very convincing manner this week, with price breaking through the key $1165 resistance level yesterday, bringing the $1181 and $1200 targets into play. The current candle is bringing a pullback for the short-term, which could give us a good new entry for longs. As long as we do not break back below $1161, then a bullish outlook is in place.

Longs around the 61.8% and 76.4% level are interesting, but as ever it is the latter which is of most significance. Given this coincides with the key $1165 breakout level, a pullback to this level would look like a great opportunity. Whether that pullback comes or not remains to be seen and in either case a bullish view is in play unless we move back below $1161.

Brent regaining ground from Fibonacci support

Brent crude has been gaining ground since falling into the 76.4% ($55.55) support level earlier in the week. Certainly it is somewhat of a slow ascent compared with the sell-off that took us here.

However, the current consolidation shows a careful and considered rise for Brent. With that in mind, another leg higher seems likely to be around the corner, with a break back below $54.65 required to negate the wider bullish view.

WTI clawing back ground following sell-off

WTI also fell into the 76.4% retracement, with price gradually recovering since. This morning has seen price consolidation and the next leg from here is expected to be towards the upside.

With that in mind, a bullish outlook remains in play unless we break back below $52.16. Given the wider long-term inverse head and shoulders pattern, this short-term view is paired up with a longer term outlook.

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