Brent oil traded slightly lower at midday on Friday, after it hit resistance slightly below the 76.05 barrier, which is Wednesday’s high. Overall, the black liquid remains above the upside support line drawn from the low of May 21st, while in the bigger picture, the broader uptrend is dated form back the low of April 22nd, 2020. With all that in mind, we would consider the outlook to be positive, but we would like to see a clear break above 76.05 before getting confident on more advances in the short run.
A move above 76.05 would confirm a forthcoming higher high on the 4-hour chart and may initially pave the way towards the 78.00 zone, which is marked as a resistance by the highs of 26th and 29th of October, 2018. If that territory is not able to stop the bulls and breaks, then the next hurdle may be seen at around 79.85, marked by the high of October 23rd.
Taking a look at our short-term oscillators, we see that the RSI, although above 50, has turned down again, while the MACD, despite positive, lies below its trigger line, pointing south as well. Both indicators detect slowing downside speed, which means that the latest retreat may continue for a while more before we see the bulls taking full control, perhaps for a test near the upside line or the 74.55 support level.
Now, in order to abandon the bullish case for a while, we would like to see a dip below 74.20, a barrier marked by the inside swing high of June 21st. This would also take the price below the pre-mentioned short-term upside line and may encourage the bears to push the action towards the low of that day, at around 73.00, or the low of June 17th, near 72.05. If neither area is able to stop the decline, then a break lower could see scope for extensions towards the 70.75 zone, which supported the price action between June 3rd and 8th.
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