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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Crude oil eyeing Falling Wedge as gold prices may reverse

Crude oil prices continue trading lower within a Falling Wedge pattern; gold prices may be readying to reverse lower, but confirmation lacking and XAU/USD is eyeing RSI divergence, Rising Wedge and an Evening Star.

Source: Bloomberg

Crude oil technical analysis

Crude oil prices are trading within a Falling Wedge chart formation. The latter is a bullish reversal pattern, but prices need to break above it to begin placing the focus back to the upside. Until then, the focus remains tilted lower as WTI continues to consolidate lower within the boundaries of the Falling Wedge.

Key support appears to be the 71.13 – 70.10 support zone, as well as the floor of the wedge. Breaking under this range would open the door to downtrend resumption, placing the focus on lows from May 2021 around 61.69 - 65.60. Otherwise, pushing above the chart formation would offer an increasingly bullish prospect. That subsequently opens the door to testing the 100-day SMA.

The latter held in November, reinstating the downside focus.

WTI daily chart

Source: TradingView

Gold technical analysis

Meanwhile, gold prices may be readying to reverse the near-term uptrend since November. XAU/USD broke under a bearish Rising Wedge after negative RSI divergence emerged. The latter shows fading upside momentum, which can precede a turn lower. Prices also left behind a bearish Evening Star candlestick pattern. While these occurrences hint that a reversal lower could be in the cards, follow-through has been lackluster.

XAU/USD has been idling just above the key 23.6% Fibonacci retracement level at 1775, establishing it as key near-term support. Falling under the latter would confirm the increasingly bearish signals highlighted earlier, exposing the 50-day Simple Moving Average (SMA).

The latter may hold, reinstating the near-term upside bias. Otherwise, pushing above 1824 would shift the focus back towards uptrend resumption and the June high of 1879.

XAU/USD daily chart

Source: TradingView

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. 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.


This information has been prepared by IG, a trading name of IG 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.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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