Brent Crude Oil Technical Analysis and Short-Term Forecast
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May Brent crude oil finally broke to the downside again and has definitively taken out support around $73.6. Brent also settled below the smaller than (0.618) target of the wave down from $79.98 and the intermediate (1.382) target of the wave down from $76.78. This was bearish for the outlook in the coming days and perhaps weeks because the wave down from $79.98 now favors a test of its $70.4 equal to (1.00) target. This is also the 78 percent retracement from $67.87, and more importantly, the smaller than target of the wave down from $83.4. Therefore, $70.4 is a longer-term bearish decision point because a sustained close below this objective will open the way for an eventual test of the $64.5 equal to target of the wave down from $83.4.
For tomorrow, look for a test of the $71.8 larger than (1.618) target of the wave down from $76.78. Settling below this will call for minor targets at $71.5 and $71.0 that make a connection to $70.4.
That said, today’s decline tested and held the 62 percent retracement of the rise from $67.87 at $72.5 on a closing basis. This is a potential stalling point. However, any move up will likely be a correction. Today’s $73.4 midpoint is expected to hold. Key resistance for the near term is today’s $74.3 open.
