Over the course of this month, the oil price weakened from the strong position it enjoyed early on, slipping to a new support zone. Finally, the Brent crude oil broke its four-month winning streak and posted a robust red candle to the end of the month.
It was a strong closed for the crude oil prices on May 27 with Brent finished above 200EA, but 200MA will be in focus from hereon. In our last week’s tweet, we forecast the price may fall to 66.50$ its C wave (100.fe). As a result, the price ran through the target and made a low at 66.00$.
Last Thursday the Brent oil price visited interesting support here at 66.50-66.00$. The area includes 100.fe (projection analysis) and 200EA (Weekly and Monthly). Breaking below the zone would increase the chances of continuing down towards 64.00$ and 61.70$ levels.
Since last Friday, Middle East tension and rumors over OPEC supply cut supported the price. We believe the recent corrective rally will be short lived and the price may contain in a range between 64.00$- 73.00$ levels in the week ahead.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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