Brent crude oil opened with a positive gap on Monday after the weekend meeting in Algiers, between OPEC and major non-OPEC oil producing nations, ended without any formal recommendation for additional production, despite US President Trump’s calls last week for lower prices. The black liquid continued moving north during the Asian morning and managed to trade above 80 dpb for the first time since May.
From a technical standpoint, the price emerged above the upper bound of an ascending triangle that had been containing the price action since the beginning of September. In our view, this may have opened the way for the 80.50 hurdle, the break of which may set the stage for our next resistance zone, at around 81.70, defined by the peak of the 21st of November 2014, as well as the inside swing low of the 5th of that month. Another break above 81.70 could encourage the bulls to put the 85.00 psychological zone on their radar, a territory also marked by the high of the 10th of November 2014.
Shifting attention to our short-term oscillators, we see that the RSI rebounded back above its 50 line and now looks to be heading towards 70, while the MACD lies above both its zero and trigger lines, pointing up. These indicators support the case for Brent to continue its upside trajectory for a while more.
On the downside, we would like to see a clear close below 78.10 before we abandon the bullish case. Such a dip would bring the price below the lower end of the aforementioned triangle and may encourage the bears to initially aim for the 77.10 support, near the lows of the 14th and 18th of September. Another dip below 77.10 may carry larger downside extensions and perhaps open the path towards the 75.70 area.
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