Gold and WTI Technical Review

Gold still in a quiet mode below 1205


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Gold continued its consolidative mode on Tuesday, staying below the 1205 (R1) resistance hurdle. With negative divergence between both of our near-term momentum studies and the price action, the possibilities for a short-term peak near the 1205 (R1) area are high. A possible pullback from the metal’s current levels could target the 1180 (S1) area or the lower boundary of the black upside channel. In the bigger picture, I still see a longer-term downtrend. Hence I would treat the recovery from 1132 as a corrective move for now. In the absence of any major bullish trend reversal signal, I would prefer to adopt a “wait and see” stance as far as the overall outlook of the precious metal is concerned.

• Support: 1180 (S1), 1160 (S2), 1146 (S3)

• Resistance: 1205 (R1), 1222 (R2), 1235 (R3)

WTI falls sharply


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The 75.50 line, but the decline was halted above our support line of 73.20. On the daily chart, the price structure is still lower highs and lower lows below both the 50- and the 200-day moving averages, thus the overall path remains to the downside, at least for now. A clear move below the 73.20 (S2) support hurdle would confirm a forthcoming lower low and perhaps open the way for the 71.00 (S3) area, determined by the lows of July and August 2010.

• Support: 73.20 (S1), 71.00 (S2), 70.00 (S3)

• Resistance: 75.50 (R1), 77.80 (R2), 80.00 (R3)


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