Commodities tanked across the board in Wednesday's trading, with no sector spared from the carnage. Precious metals and energy futures were especially hard hit. As traders watch for signs of a continuation of the selling, Brent Crude Oil stands out on the charts as being particularly vulnerable. Brent followed the complex to close several dollars lower on the session, moving briefly below the $105 per barrel level.
The Autochartist Key Level indicator identifies the current settlement as a key support level. The chart illustrated here shows this lateral support on the longer term 240-minute time interval, which clearly highlights the importance of this level. The last several pullbacks in the market have found buying interest near this $105.85 price zone, which Wednesday's sharp drop failed to hold.
Renewed selling on Thursday would confirm the key level failure and set the price in motion to a test of the projected price target of at least $101.46 per barrel. Momentum selling may ensue if the broader commodities complex proves unable to find a foothold, which would encourage a complete retracement to the bottom end of the forecast range near $95.70 per barrel.
A reversal of the current weakness with a close back above the $105.85 support level would be needed to turn the outlook to neutral in the short term.
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