Brent oil fell 2% on Monday as signs of higher output from OPEC countries and rise of U.S drilling activity.
Before retrace, to 40.0% fib (mid-August-Sep rally) the price completed the 100.0fe daily target. It has been traveling south for five straight sessions and re-tested 20MA.
Recent price action capped between56.50 and 57.30 and erased the four-week ascending channel. Potential support zone remains between 54.80-54.50 (below chart). Additional support finds at 53.50 its 50DMA.
The daily RSI sloping and oscillator turn bearish.
Resistance seems at 56.80, 57.10 and 57.80. Weekly potential supply zone remains between 57-57.75.
In our last week’s article (26 Sep) we forecast “The next level in focus is 59.70/60-61.0$”. It has made a high at 59.50 and changes the direction.
We are not discounting the fact that, earlier price action gave an upside break through 29month and eight-month descending trendline.
In an extreme bullish case: Propel above 60.0$ could lift price further to 80.0% fib reaction to 61$ (69.60-27.00$ fall). Getting above 61$ could open further to 67+$.
View: Limited upside risk available
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