Brent Oil is trading in the red and could resume the bearish momentum, plunged in the last two hours and erased the morning gains. Drops surprisingly as the United States Crude Oil Inventories have come much worse that expected, but the bears are very strong on the short term and look determined to drag the rate much lower in the upcoming period.
I’ve said in yesterday’s report that the price could come back to test and retest some important resistance levels before will resume the downside movement. If you take a look at the Brent’s daily chart you’ll notice that we have a retest today, but is too heavy and has fallen aggressively again, signalling that the bears are in full control.
Technically is expected to decrease further in the upcoming period because is located under some important resistance levels, personally I’m expecting to see the rate somewhere below the $44.00 per barrel, where we have a major support area.
The US Crude Stocks dropped to -6.3 million barrels in the previous week, much below the -2.4M estimate and versus the 0.1M in the previous reading period.
Price decreased sharply in the last two hours and looks determined to approach the 47.32 yesterday’s low, I’ve said that we’ll have a great selling opportunity if will come back to test and retest the upper median line (uml) of the major descending pitchfork and the 50% retracement level, so we may have a selling opportunity after the failure to stay near these resistance levels.
The next major downside target will be at the 50% Fibonacci line (ascending dotted line) and at the 38.2% retracement level, could be attracted by the support zone after the false breakout above the upper median line (uml) and above the 50% retracement level.
A larger increase will come only if the rate will jump and stabilize above the 50% retracement level, but this scenario is less likely to happen at this moment. Only the fundamental factors could force the rate to increase sharply again.