Technical analysis: key levels for gold and crude

Gold shows signs of a bullish reversal following on from its recent demise. Meanwhile, crude looks set for a strong end to the week, with price breaking higher from a triangle pattern.

Oil barrels
Source: Bloomberg

Gold showing tentative signs of a resurgence

Gold has rallied into the $1265 resistance level this week, providing a new higher high. This points towards the market possibly reversing some of the losses seen earlier in the month.

For now, an hourly close above $1265 could provide a bullish signal, whereas a move lower would look like a retracement and precursor to another move higher. As such, look out for any retracement to bounce within the 61.8%-76.4% retracement region.

This bullish outlook remains unless we see an hourly close below $1246.

Gold price chart

Brent breaking higher from triangle

Brent has broken through trendline resistance overnight, providing clues that we could see a rally back towards the $53.95 high set last Monday.

Given this breakout, any retracement would be seen as a buying opportunity, as long as we do not see an hourly close below $51.71.

Brent crude price chart

WTI approaches key resistance after trendline break

WTI is also breaking out for a symmetrical triangle pattern, with price pushing on towards the first swing high of $51.44. The ability to break through $51.44 is key to providing a bullish signal. Should we see WTI break through that resistance level, we would have confirmation of the bullish breakout across both markets.

That said, given the distance between the breakout level and the previous high on Brent is significantly larger than WTI, it makes sense to trade Brent for the expected rally. A bullish view is in play unless we see an hourly close below $50.12.

WTI crude price chart

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.