Oil Technical Update
Brent Crude Daily Chart 3:30PM EDT
After confirming an inverted head and shoulder pattern in July, Brent Crude has been trading in a rising channel, seen in the daily chart. The rally has picked up bullish momentum in the daily chart, but in the short-term might be a bit oversold and exhausting as the daily RSI and price action shows a slight divergence at 70.
The 116.33 level is also a previous support pivot from 2/10 and 4/18. To the left of the daily chart, this was also a resistance pivot on 11/8/2011, which was the high for a half-year consolidation period between August 2011, and February 2012. You can also see that as price nears this pivot, it is also testing a declining trendline that goes back to the February and 2012 high at 128.15
A hold above 114 favors the bullish break scenario, while a break below introduces flat to bearish action. A break below 112.70 then shows topping – a double top -in the 4H chart. However only a break below the rising trendline and the 111 handle should introduce the bearish outlook. This 111 area is also the 200-day SMA. Fianlly, note that the bullish momentum remains in this 4H chart if the RSI remains above 40 as it has done throughout the rising channel.
Brent Crude 4H Chart 3:35PM EDT
Fan Yang CMT is the Chief Technical Strategist, trader, educator and a of the main contributors to FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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