Gold Could Correct Lower While Oil Price Remains in Uptrend

Gold price failed to stay above $1,210 and declined below $1,205. Crude oil price remains in an uptrend, but it could correct slightly in the short term.

Important Takeaways for Gold and Oil

  • Gold price settled below a key support and pivot level at $1,208 against the US Dollar.
  • There is a contracting triangle in place with resistance at $1,204 on the hourly chart of gold.
  • Crude oil price gained bullish momentum recently and broke the $68.00 and $70.00 resistances.
  • There is a bullish trend line formed with support at $69.90 on the hourly chart of XTI/USD.

Gold Price Technical Analysis

Gold price surged higher after forming a key bottom near $1,184 against the US Dollar. The price climbed above the $1,190, $1,200 and $1,210 resistance levels to move into a bullish zone.

The upside move was strong as the price traded towards the $1,215 level. However, the price failed to hold gains above the $1,210 level and later started a downside move. There was a slow and steady decline and the price broke the $1,210 and $1,208 support levels.

Gold Price Technical Analysis

The decline was such that the price even broke the $1,200 support and settled below the 50 hourly simple moving average. It traded as low as $1,196.31 and later corrected higher. It moved above the 50% Fib retracement level of the last decline from the $1,206.80 high to $1,196.31 low.

However, the price is facing resistance near the $1,204 level and the 50 hourly SMA. More importantly, there is a contracting triangle in place with resistance at $1,204 on the hourly chart of gold.

Therefore, the price could fail to break the $1,204-1,205 resistance and decline once again. On the downside, the $1,195 and $1,190 levels may be the next targets for sellers.

On the other hand, if the price breaks the triangle resistance at $1,205 and settles above the 50 hourly SMA, there could be a nice upward move towards the $1,208 pivot level and the $1,210 resistance.

Oil Price Technical Analysis

Crude oil price remained in a crucial uptrend from the $65.00 swing low against the US Dollar. The price climbed higher recently and broke many resistances like $66.00, $68.00 and even $70.00.

The price traded towards the $70.25 level and settled above the 50 hourly simple moving average. A high was formed at $70.26 before the price started a downside correction. It moved down and broke the $70.00 support.

Oil Price Technical Analysis

There was also a break below the 50% Fib retracement level of the last wave from the $69.37 low to $70.26 high. However, the decline was protected by the $69.75 support.

The 61.8% Fib retracement level of the last wave from the $69.37 low to $70.26 high also acted as a support. Moreover, there is a bullish trend line formed with support at $69.90 on the hourly chart of XTI/USD.

The price recovered and is currently trading near the $70.00 level. At the outset, it seems like the price is struggling to gain momentum above the $70.00 level. Therefore, there is a possibility of a downside correction below the trend line and the $69.75 level in the near term.

Below $69.75, the next major support is positioned near the $69.50 level, which is also a crucial pivot area. On the other hand, if the price continues to move higher, it could break the $70.25 resistance and test the $70.50 level.

Aayush Jindal

Aayush has spent over a DECADE as a financial markets contributor and observer. He specializes in market strategies and technical analysis, comes with an IT background. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets. He is a software engineer by profession, loves blogging and observing financial markets.

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