Brent rally stalls on large US inventory build, focus on today's close
|- Brent oil created a doji candle yesterday, a sign of bullish exhaustion.
- A large US crude inventory buildup likely applied brakes to oil rally.
- A close below $68.82 would confirm a bear doji reversal
Brent oil is currently flatlined at $69.34 per barrel, having hit a 4.5-month high of $69.94 on Wednesday.
The bid tone weakened in the US session yesterday after the Energy Information Administration (EIA) reported an inventory increase of 7.2 million barrels for the week to March 29. The markets were expecting a 2.8-million-barrel build in oil inventories.
Notably, the oil benchmark created a doji candle yesterday, which is widely taken to be a sign of indecision in the market place.
The candle, however, has appeared following a rally to November highs. So, it could be argued the indecision is predominantly among buyers. The doji candle, therefore, could be considered a sign of bullish exhaustion. Traders usually wait for confirmation in the form of strong follow-through, preferably a break below the doji candle's low.
Hence, a bearish reversal would be confirmed only if prices close below $68.82.
Technical Levels
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