Forex Technical Update

Brent Crude

Brent

  • The oil rally since hitting 100 in August has been an ABC correction as seen in the 4H chart.
  • However, the rally has stalled under 115.50, with a couple of attempts failing to break above.
  • This price action appears to be forming a double top with support at 108.45-108.50.
  • Below this pivot we first open up the pivot at B, of 105-105.10.
  • Then below that, we open the target of 100.00, which is just about the origin of the rally, and the August low.
  • The daily chart shows a market in a declining channel, or wedge if you drew the resistance and support with a slight convergence.
  • The point here is that the RSI is held below 60, and therefore the bearish momentum is still here.
  • With a break below 108.50, and a push of the RSI below 40, we signal a bearish continuation.
  • Then, if the RSI in the daily chart reaches 30, the market is likely heading back towards the 100 psychological support.
  • Note that this opens up further bearish outlook, as it would be a successful break below the 200SMA in the daily.
  • Addition confirmation to the downside can be gotten if a subsequent rally fails to break back above 108.50, or remains below the 200SMA.
  • This would suggests further decline below 100. 89.60 is opened up as support for the extended bearish scenario in the longer medium term (through Q4).

Brent

 

 

 

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Fan Yang CMT
Chief Technical Strategist

FXTimes