Brent crude oil shrugged off last week’s close to push higher amid vaccine news. Since mid -April, oil prices keep moving higher for ten weeks out of twelve. However, gains were limited for the four weeks on near-term demand concerns.
Over the weekend, market sentiment further improved on the latest vaccine hopes. The FT reported that a coronavirus vaccine being developed by Oxford University and AstraZeneca had shown promise in an early trial. The vaccine generated “robust immune responses” and was “tolerated” among all patients in the study, AstraZeneca said on Monday.
Whenever the vaccine news hits the wires, the market tends to discount the fact of demand weakness. But we still believe the demand weakness could stay on top for the near-term. A rise in infection in Melbourne and Los Angeles have authorities considering stay-at-work orders. Rising infections in India and the US are adding concerns to the demand flare-up idea.
The Brent crude oil price has been moving in a well-defined ascending triangle pattern with painting a higher lows pattern on the four-hour chart in the past four weeks. The given model suggests prices are ready to soar again towards an unfilled gap standing at $45. At the same time, daily indicators show a mixed view with RSI recovering from 50 levels, whereas the oscillator remains bearish.
The Brent oil price needs to cross and close above $44.25 to print another high at $46.00 an $49.50. The near-term support finds at $42.50 below here focus on $41.40. A breakdown and close below $37 mean a distribution pattern start the action that could lead to a decent pullback.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
What is your Technical View?
Do you have a different idea? Please leave us a comment and get an answer from our professional analysts