Brent technical analysis: Recovers from 7.5-month lows forming a bear flag
- Brent oil has created a bear flag, a continuation pattern, on the 4-hour chart.
- A flag breakdown would accelerate the sell-off from July 31 highs above $65.00.
Brent's recovery from the 7.5-month low of $55.88 hit on Aug. 7 could be short-lived.
This is due to the fact that the corrective bounce has taken the shape of an inverted or bear flag on the 4-hour chart.
A bear flag is a pause that usually refreshes lower. In other words, a breakdown accelerates the preceding bearish move.
As of writing, the lower edge of the flag is seen at $57.83. A 4-hour close below that level would confirm a flag breakdown and open the doors for a drop toward $45 (target as per the measured move method).
On the way lower, Brent may find support at the recent low of $55.88 and $50.26 (Dec. 26, 2018 low).
As of writing, Brent oil is trading at $58.33 per barrel, having hit a high of $59.09 yesterday.
4-hour chart
Trend: Bearish
Pivot levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
