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Technical analysis: key levels for gold and crude

Will the rebound we are seeing in gold and Brent continue apace, or simply falter back into downtrend?

Oil pump
Source: Bloomberg

Gold rallies back into Fibonacci resistance

Gold has managed to break back through the crucial $1214 resistance level this morning. The original break below that level seems to pave the way for further downside on a wider timeframe.

Whether we are going to see some form of a rebound before that next leg lower remains to be seen. For that to look likely, we would need to see a break back up through $1229. Until that happens, shorts look attractive from the 61.8%-76.4% retracement zone ($1220-$1223).

Brent regains ground, yet it isn’t out of the woods yet

Brent has been regaining ground this week, with the price rallying into the 61.8% Fibonacci retracement so far. Coming off the back of a short rally in late June and early July, there is a possibility that the rally is not over.

However, for that to come into play, we would need to see a break through $49.91 resistance. Until then, there is a good chance that we are seeing the May/June selling pressure come back into play. As such, watch out for a potential move lower from this region, where a break back below $46.20 would confirm that we are due to see a significant amount of further downside.

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