Brent oil prices are down by more than 13.00% from October high’s and lost all the key MAs.
Selling pressure remains very strong; a descending channel is still evident in the daily chart. However, turning to the daily indicator, RSI study reached an oversold level; currently sits at 30.0 and the oscillator is trying to form a base sooner.
Technically speaking, the price action closed below 200MAs but manage to hold the 50MA (Weekly). Under these factors, any further correction could shift the focus to the next immediate support at 70.00$ levels.
We remain to stick to the other week’s forecast “Brent crude oil topped 87.00$. That’s going to be the flash news/headline when it closes below 77.00$.”
The near-term risk surrounding the Crude oil trend can still be considered neutral/limited downside risk. At the same time, support at the mid-August low 70.50$ remains noticeable. We believe it could consolidate between 70.00$-80.50$ for some days/weeks.
Turning to the positioning, bullish bets cut crude in the latest week.
Hedge funds and other money managers cut their bullish wagers on crude in the latest week to a one-year low, the fifth consecutive cut during a month when prices posted their most significant drop since July 2016, data showed on Friday, Reuters reported
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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