Gold and Crude Oil Prediction: As Momentum Slows, Here Are Levels To Look Ahead – DailyFX

XAU/USD daily chart

Gold, XAU/USD, Crude Oil, WTI – Commodity Technical Analysis:

  • Gold and prices of crude oil maintain a near-term upside technical tendency
  • But, WTI and XAU/U.S. dollar seem to show signs of exhaustion
  • What are the key levels to watch in case a lower turn comes along?

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Golden technical analysis

Gold Prices keep trading up within the confines of a Rising Wedge chart formation. This is typically a bearish pattern that can open the door for the previous downtrend to resume. In this case, that would be the path lower gold took from March to November. But while XAU/USD continues to trade within the confines of the wedge, the trajectory may remain slightly upside in the near term.

Immediate resistance appears to be the 78.6 percent Fibonacci retracement level at 1822. Going higher opens the door to the ceiling of the wedge. Keep a close eye on RSI. Negative divergence continues to show that upside momentum is fading.

A breakout below the wedge could produce an increasing downside technical bias. That would put the focus on the 50-day Simple Moving Average (SMA). The latter may restore the upward trend in the short term. Otherwise, the bending zone 1725 – 1735 will be below that.

XAU/USD daily chart

Chart created in TradingView

Technical analysis of crude oil

Unlike gold, prices of crude oil have confirmed an upside break through the ceiling of a bullish Falling Wedge chart formation. That has opened the door to an upside technical trend that could reverse the near-term downtrend from November to mid-December. However, there are some indications that upward momentum is struggling.

The first is that oil failed to clear the 50-day SMA, which maintained a downward trend. As prices tested the former, a Shooting Star candlestick pattern formed. The latter is typically a sign of indecision that turns more bearish as prices follow lower after the star’s formation. This has been the case.

Immediate support appears to be the 23.6% Fibonacci retracement level. Closing lower exposes the 71.13 – 70.10 support zone. In the event that prices move above the 50-day SMA, the main resistance after that appears to be the 61.8% retracement level at 84,703.

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WTI daily chart

WTI daily chart

Chart created in TradingView

— Written by Daniel Dubrovsky, senior strategist for DailyFX.com

Follow him on Twitter to contact Daniel:@ddubrovskyFX

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