Brent crude oil contracts since the creation of this year’s high (June 19th at 115.70) clearly decreased. In recent days, support in the vicinity of this year minimum (104.00) was tested two times in a row. What is more, in last five days bulls managed to defend successfully. Next, big pro-growth candle formed yesterday, negating earlier pin-bar candle. During this declines (since mid-july) a correction has developed. It stopped at 38.2% Fibo, earlier downward movement and now this very level (108.60) will be crucial for buyers.
Quick breakout of before mentioned resistance will be equivalent to the activation of the W formation in which the minimum range is around 113.00 – a level at which the course retraced few times in the last 12 months. Present support breakout should bring market sell-off with the goal near 97.20 (2013 low).
When it comes to gold, the situation looks almost like a mirror image of Brent crude oil. From June to mid-July course was clearly increasing and the half of the month brought correction which stopped above really important supply area (1280) – during April and May it was a strong foundation, this level is also 61.8% Fibo abolition of upward movement. Beginning of August is definitely an advantage for bulls, which has already drawn a course over 1300.
Growth rate in the coming weeks over July’s high (1345) should give the green light to new high establishment this year and perhaps returning over 1400USD. Along the way, gold is still in resistance (triangle formation) – breaking above will be a strong signal of trend retracement (the downward one begun already in 2011) which should result in recent consolidation breakout (1180-1435) and going back to the historical vicinity of 1600. If, however, support around 1280 breaks below and then next support (1240) does not provide enough defense strength there will be a likelihood of testing 2013 lows (around 1180).
