REVIEW
Brent oil finished off last week in an indecisive territory. The bulls and the bears could not decide on who will dictate the future direction of Brent this week. Overall, looking at the bigger picture, the commodity is above its long-term upwards moving trendline, drawn from the lows of 21st of June last year. But the shorter-term price action is showing us a different picture, where Brent is getting held by the short-term downwards moving resistance line, taken from the peak of the 22nd of May.
OUTLOOK (SCENARIO A / B)
For now, we will support the short-term scenario, until we see a violation of the aforementioned resistance line. A move and eventually a break of the 74.50 mark could see scope for downside extensions towards the 72.50 area, marked by the lows of May. If the selling does not stop there, then the black gold could easily make its way to the 70.70 area which coincides with the previously mentioned long-term trendline.
If, eventually, the break of the downwards moving resistance line happens, then we will shift our near-term outlook to a more positive one for the Brent Oil. If the break happens, this could place the price above the 77.80 level again and the bulls could then start charging the May highs at around the 80.50 zone. A move above that zone could drive the commodity towards new highs. A good area of resistance could be at the 81.70 level, defined by the peak of the 21st of November 2014.
Brent oil finished off last week in an indecisive territory. The bulls and the bears could not decide on who will dictate the future direction of Brent this week. Overall, looking at the bigger picture, the commodity is above its long-term upwards moving trendline, drawn from the lows of 21st of June last year. But the shorter-term price action is showing us a different picture, where Brent is getting held by the short-term downwards moving resistance line, taken from the peak of the 22nd of May.
OUTLOOK (SCENARIO A / B)
For now, we will support the short-term scenario, until we see a violation of the aforementioned resistance line. A move and eventually a break of the 74.50 mark could see scope for downside extensions towards the 72.50 area, marked by the lows of May. If the selling does not stop there, then the black gold could easily make its way to the 70.70 area which coincides with the previously mentioned long-term trendline.
If, eventually, the break of the downwards moving resistance line happens, then we will shift our near-term outlook to a more positive one for the Brent Oil. If the break happens, this could place the price above the 77.80 level again and the bulls could then start charging the May highs at around the 80.50 zone. A move above that zone could drive the commodity towards new highs. A good area of resistance could be at the 81.70 level, defined by the peak of the 21st of November 2014.