Gold price consolidates as Brent crude price slides lower
Gold consolidates after bullish break, yet Brent crude looks destined for further downside after breaking below Fibonacci and trendline support.
Gold likely to push higher after recent retracement
Gold managed to break through the $1563 resistance level on Tuesday, seemingly paving the way for a bullish push after recent declines. While the first retracement from that peak came into the 61.8% Fibonacci level, we are seeing further consolidation play out for now.
A break through $1568 certainly builds on the notion that we are on the cusp of another leg higher. Alternatively, should we see the price break below $1546 (and particularly $1536), then we would start looking at things with a more bearish short-term view once again.
Brent crude breaks crucial support zone
Brent managed to break below a crucial area of support, bringing about a heightened chance of further downside for crude. Recent speculation that the coronavirus in China could spark a steep decline in demand for crude products has certainly played its part in breaking out from the uptrend that has lasted the entirety of the fourth quarter (Q4) of 2019.
However, despite the break below trendline and Fibonacci support, we remain above the critical $60.20 low from early December. Should we see that level broken, it would provide a more confidence bearish signal for the medium term. For now, the break below all Fibonacci levels points towards further downside to come, with a bearish outlook in play unless we see a break through $65.20 resistance.
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