Hassan_Abdullah

Outlook of Brent Crude Oil (7-JANUARY-2020)

TVC:UKOIL   CFDs on Brent Crude Oil
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It is concluded that Brent eventually exactly hit the short-term target of USD54.84 based on previous updates ( Brent Crude Oil on 20-Dec-2020 and 3-Dec-2020). Brent however reversed after that.

Since Brent rebounded off 38.2% Fibonacci retracement on 2-Nov-2020, it has been progressing a new base of uptrend market structure by continuously making higher highs and higher lows. This bullishness is also supported by the rising combined 20,50&200-day EMA and green Kumo cloud.

At this juncture, there will be two likelihoods:

First, a cautious stance should be taken as:
1) Brent has touched upper BB line which indicates the price has overextended, and this is also accentuated by the RSI oscillator is above 70 of overbought band.
2) A bearish divergence between price and STO oscillator which the latter shows Brent has reached overbought territory.

These may send a signal of retracement (reverse and move downward) to make a new higher low base before Brent continuing its upward trajectory in forming the next higher base of uptrend structure.

Second, if Brent violates above the critical resistance of USD55, it is expected the Brent to pave the way towards initial medium-target of USD60 as next upper resistance which coincides with earlier 78.6% Fibonacci projection .

Nearest support levels will be USD51 of 20-day SMA mid-line BB (which has been tested and rebounded off several times since 18-Dec-20) and USD49.

Comments

As of 8-Feb-2021, Brent has challenged the USD60 resistance level
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