Brent crude oil fell sharply on Friday, after hitting resistance at 122.25, with the slide taking the price below Thursday’s low of 116.75, thereby confirming a forthcoming lower low. That barrier now coincides with the 200-EMA. The slide was stopped near the 112.65, but with the black liquid staying below the 116.75 zone, we see decent chances for further declines.
A clear and decisive break below 112.65 could invite more bears into the action, who may initially aim for the 109.15 barrier, marked by the low of May 16th. If they don’t stop there, we could see them pushing towards the low of May 19th, at 105.75, where another break could carry larger bearish implications. The price could fall to 101.65, marked by the low of May 11th, or near the 99.70 zone, defined as a support by the low of April 25th.
Taking a look at our short-term oscillators, we see that the RSI lies slightly below 30, while the MACD runs below both its zero and trigger lines. Both indicators detect strong downside speed and support the notion for further declines in Brent oil.
On the upside, we would like to see a break back above 116.75 and the 200-EMA, before we abandon the bearish case. This could wake some bulls up, who could climb towards the 122.25 barrier, marked by Friday’s high. Another break, above 122. 25 could pave the way towards the 126.15 territory, which acted as a ceiling between June 8th and 14th.
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