By Friday’s closing bell, Brent oil was still balancing between two lines: a short-term tentative upside one taken from the low of August 7th and a medium-term downside resistance line drawn from the high of April 25th. But after the attacks on the Saudi’s biggest oil production facilities during the weekend, this morning, Brent oil opened with a huge gap to the upside, automatically placing itself above the aforementioned downside line. The price had moved back down slightly, but this could be seen as a small correction before another leg of buying, hence why we will stay somewhat bullish for now.
Brent oil might correct a bit more to the downside, where it could find support either near the 65.45 zone, or the 200-day EMA. If that happens, the bulls could quickly take advantage of the lower price and aim for the upside again. Such a move may push Brent oil to the 67.45 barrier, a break of which could set the stage for a test of the 69.23 hurdle, marked by the high of May 28th. If the buying doesn’t stop there, a further move north could bring the commodity to the 71.02 level, which is the inside swing low of May 20th.
On the downside, if the price slides below the 64.00 hurdle, which is the high of last week, and also falls below the previously-mentioned downside line, this could temporarily spook the bulls from the field. This move could bring Brent oil to the 62.38 obstacle, a break of which may send the price to the 61.00 zone, marked by the highs of August 14th, 29th and 30th. The commodity might get held near that area, or even rebound back up a bit. But if it continues to trade below that downside line, the black liquid could slide again. If this time the 61.00 obstacle fails to withstand the bear pressure, a break may send the price towards the previously-discussed short-term upside line, or the 59.09 area, marked by last week’s low.
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