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Technical analysis: key levels for gold and crude

Both gold and Brent have begun to show signs of a resurgence following a longstanding downtrend.

Gold bar
Source: Bloomberg

Gold rallies into Fibonacci resistance

Yesterday’s sharp move lower for gold brought the price close to a major ascending trendline of support. We have since seen a strong move higher overnight, with the price moving back into the 76.4% retracement level. This brings us to a crossroads, where there is a possibility of another move lower to fully reach trendline support.

However, given that we saw the market move close to that trendline, there is a chance we could see a recovery from here. As such, watch out for potential short-term intraday bearish reversal signs to suggest the potential for another move lower. On the flip side, a break through $1259 would give us a good clue that this market has bottomed out.

Brent breaks trendline resistance

Brent has finally broken through trendline resistance and the four-hour 50-day simple moving average (SMA), following a month long downtrend. This gives us the potential to break higher from here.

But for that bullish view to come into play, we would need to see a $46.79 broken to the upside. As long as the price remains below that level, there is a good chance of further weakness, and some warning signs are beginning to appear.

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