Commodities

Technical Analysis – Brent futures finds support at 1-year low; strongly bearish in near term

Posted on November 21, 2018 at 3:13 pm GMT

Melina Deltas, XM Investment Research Desk

Brent crude oil futures with delivery in January 2019 plummeted to an almost one-year low around 61.70 on Tuesday. The price is set to complete the seventh straight negative week, however, looking at the very-short term timeframe, it has jumped above the multi-month low today. The MACD oscillator is flattening below its trigger line, while the RSI is moving sideways in the bearish zone.

If the price continues the weak upside movement, it would challenge again the 64.60 resistance, before being able to re-touch the 20- and 40-simple moving averages (SMAs) near 65.54 and 66.14 respectively. A significant leg above these lines could push prices towards the 23.6% Fibonacci retracement level of the downleg from 86.71 to 61.70 around 67.63.

However, in case of a slide below 61.70, the next support would come from the 60.85 level, taken from the low on December 2017. Should prices decline further, the focus shifts to 59.50, identified by the inside peak on September 2017.

Overall, Brent seems to be strongly bearish over the last one-and-a-half months following the pullback on the 86.71 high.

brent crude commodities

Legal disclaimer: The material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instruments. XM accepts no responsibility for any use that may be made of these comments and for any consequences resulting in it. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. The research and analysis does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it.

It has not been prepared in accordance with legal requirements designed to promote the independence of research, and as such it is considered to be marketing communication. Although we are not specifically constrained from dealing ahead of the publication of our research, we do not seek to take advantage of it before we provide it to our clients. We aim to establish, maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. We operate a policy of independence, which requires our employees to act in our clients’ best interests and to disregard any conflicts of interest in providing our services.

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losing all of your invested capital, so please make sure that you fully understand the risks involved.