The technical picture of Brent oil on our 4-hour chart continues to stay bearish, as the price remains below a couple of short-term downside lines: one, which is drawn from the high of October 23rd and the other, steeper one, taken from the high of October 27th. Despite testing the steeper downside line today, the commodity is still struggling to overcome it. If that downside line stays intact, this may result in another slide, however, to get a bit more comfortable with that idea, a drop below the current low of today, at 36.10, would be needed.
If Brent oil does go ahead and falls below the 36.10 zone, this will confirm a forthcoming lower low, possibly clearing the way for a further drift south. The black liquid could fall to the 34.29 zone, marked by the low of May 29th, where the price might stall for a bit. If so, the commodity may rebound somewhat, but if it continues to trade below that aforementioned steep downside line, this could result in another decline. A drop lower and this time a break of the 34.29 zone might open the door for a move to the 33.80 level, marked by the low of May 28th.
The RSI and MACD are still indicating negative price momentum. The RSI is well below 50 and the MACD is well below zero, and its trigger line. But the fact that the RSI is currently pointing slightly to the upside and the MACD a bit on the flat side, supports our idea, discussed above, to wait for a drop below the 36.10 hurdle first.
Alternatively, if the aforementioned steeper downside line gets broken and the price rises above the 37.07 barrier, marked by the low of October 30th and the current high of today, that may lead Brent oil to a larger correction higher. The commodity could then travel to the 38.35 obstacle, a break of which might clear the path to the 38.90 level, marked by the low of October 28th. Around there the uprise may get halted, as the price could hit the other previously-mentioned downside line, which might provide additional resistance.
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