Brent’s recovery from Friday’s low of $42.49 amid broad based USD sell-off appears a corrective rally and thus caution is advised as prices trade above 5-DMA level of $43.52, especially since the Baker Hughes data released on Friday showed increase in rig count for fifth straight week.
Above 5-DMA, fresh offers could come-in and push prices back to $43 handle. A violation there could yield a drop to 200-DMA level of $42.14.
On the higher side, only a day end closing above $44.93 would suggest a bottom is in place at $42.49. The next move higher then could be capped around $45.88 (July 11 low).