As we can see from the daily chart, Brent Crude keeps moving lower, but the downside could be limited soon, due to the long-term uprising support line drawn from the low of the 21st of June last year. The recent slide could be seen as nothing more, but a temporary correction, before the commodity could reverse back north.
Even if Brent oil breaks the 78.35 support zone, marked by the low of last week, still, as mentioned above, the downside could be limited. If the aforementioned upside support line continues to hold, we could see the bulls taking advantage of the lower price and lifting the “black gold” back up again. If such a move happens, then a better confirmation of Brent potentially moving higher could be a break back above the 78.35 zone. This is where more bulls could join in and drive Brent oil towards 81.60, or even the 82.40 level, marked by the inside swing low of the 8th of October.
The alternative scenario here would be if the previously mentioned long-term upside line does not hold and Brent Crude closes below the 74.10 support area, which was the inside swing high of the 14th of August. This way we could position ourselves for a possible move towards the 70.55 hurdle, which was the lowest point of August. If that level is not able to withstand the bear-pressure, Brent oil could continue its way in forming lower lows. A break below 70.55 could lead to a test of the 66.65 obstacle in the longer-run. That area was marked by the low of the low of the 4th of April.
The RSI is currently a few steps below 50, while the MACD lies below its trigger line and appears ready to turn negative soon. Both these indicators confirm our view that Brent could continue correcting a bit lower, perhaps towards the uptrend line drawn from the low of the 21st of June 2017.
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