Brent Oil outlook: Near-term action in sideways mode, technical picture remains bearish

Slobodan Drvenica Windsor Brokers

Brent Oil

Brent price holds within a narrow consolidation for the second straight day, following Tuesday’s massive losses (down over 6% for the day), but the action stays under psychological $80 barrier with upticks capped by 200DMA ($80.73) and the base of daily Ichimoku cloud.

Fresh bears pause despite optimistic news about the latest US-Iran peace talks, as traders remain cautious following failures of previous agreements, as well as on persisting tensions after attacks on Saudi tankers in the Red Sea.

Technical picture on daily chart remains increasingly bearish (thick daily cloud weighs/formation of daily Tenkan/Kijun-sen bear cross/strengthening negative momentum), though markets still depend more on geopolitical developments, as currently dominant factor in creating market direction.

Near-term action is expected to remain bearishly aligned while holding below 200DMA/cloud base and pressuring immediate support at $77.64 (Fibo 76.4% of $70.13/$101.97).

Sustained break lower to expose $75.28 (July 10 trough) and $74.25 (lower 20-d Bollinger band) guarding key $70 support zone.

Alternatively, penetration of daily cloud would ease immediate downside risk and expose barriers at $83.73 (Fibo 23.6% of 101.97/$78.10 descend); $86.05/32 (daily Kijun-sen/Tuesday’s spike high) and upper pivot at $87.22 (Fibo 38.2%).

Res: 80.77; 83.73; 86.05; 87.22.
Sup: 78.10; 77.64; 75.28; 74.25.

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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