Brent Oil: Break above $76.38 needed to shrug off deteriorating momentum – Credit Suisse
|The Brent Crude Oil rally has stalled again, with weekly momentum deteriorating sharply. Nonetheless, strategists at Credit Suisse expect the black gold to eventually resume its rise to test the $77.84 at first.
Momentum picture warns of a top
“The deterioration in weekly RSI momentum is now of growing concern, but our bias remains to view consolidation as a temporary pause ahead of an eventual break higher.”
“A quick move back above $76.38 though is needed to stabilize the market for a test of the $77.84 high. Beyond here can curtail thoughts of a more prolonged correction with resistance seen next at our original bull ‘flag’ target at $79.10, then the ‘measured triangle objective’ at $82.50.”
“Below $71.74 would see bearish pressure start to increase further in line with the momentum picture for a test of the $68.3/67.44 recent low and trend support. Removal of here would warn of a more serious break lower, for a move to $64.57 next, with scope for the 200-day average at $61.65.”
“Weekly RSI momentum holds a top and a bearish divergence, increasing the risk for a potential top in the market also.”
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