Gold and Crude Oil – Daily Analysis
Upon reaching $1235, there has been significant selling on gold by major players, which can be seen by the volumes in both Forex (on high liquidity brokers) and Futures. An important high was made at $1272, which held on multiple break-out attempts. On the most recent low, VSA also showed some demand, which started this new rally onto the previous highs. Volumes are drying up and today’s price is on the lows of the day. If the weakness continues on this rally, it’ll form an head and shoulders top (with selling behind, which is perhaps more important than the price formation), and we’ll be looking for shorts near $1272 or on the break-out of $1204.
Brent Crude Oil
Brent Crude Oil took a pause in the uptrend and corrected, when prices reached the upper part of the trading channel like we noted on the last Crude Oil analysis. On reaching the trendline, both VSA and Reversals signaled a reversal, but after the trendline was broken the rally attempt first showed high volume on a narrow range bar (first arrow), afterwards an upthrust, a bar making a higher high but closing on the lows, and afterwards more high volume even though prices didn’t move much.
Later, again using the previously set sensitivity (4), Reversals showed the way, and finally the retracement was over, this time without any vacillating type of rally. This rally made the prices reach the top of the daily channel. Right now lower timeframes look more promising to trade crude, since the current move is already well extended, though there is no significant weakness to look for shorts just yet.