Technical analysis: key levels for gold and crude

Gold has questions over whether it can continue its recent uptrend, given the rally towards a key resistance level. While WTI continues to trend upwards in a convincing manner. 

Gold bars
Source: Bloomberg

Gold approaching crucial resistance level

Gold managed to rally back from the brink, after attempting to break to a new swing low, below the $1244 level. Despite the fact that the price managed to bounce back from that level, it is without a doubt a potential warning sign that we could head in that direction. Ahead we have a crucial resistance zone, between $1261 and $1264, which will dictate the state of play going forward.

The ability to break and post an hourly lose above $1264 would mean that we are likely to begin trending higher once more in a convincing manner. However, given yesterday’s move back into $1244, there is also a good chance we could see the market turn lower once more from this zone. It is a wait and see situation. 

WTI continues to trend higher

WTI has been gaining ground in a very consistent manner lately, following a double bottom at the 61.8% retracement. Yesterday’s pullback would have been seen as a countertrend retracement, which is expected to lead to another leg higher. We seem to be seeing it come into play now, given the rally in recent hours.

Yesterday’s high of $51.05 is being utilized as new support, yet bear in mind that any further downside would be looking for Fibonacci support to come into play. As long as we do not see a break back below $50.13, a bullish outlook remains in place.

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