Finally, the crude oil market moved upwards. By the beginning of this new week of July, a Brent barrel has risen to 78.12 USD. Investors still doubt the prospects of the demand but the news support buyers. A fire at an oil platform of a Mexican company Pemex was one of the critical triggers for the bulls.
In the medium run, the crude oil market remains affected by the fears of a recession. The third quarter might demonstrate more evidence of this. According to Baker Hughes, the number of crude oil rigs in the US dropped to 540 units (-5 rigs) over a week, and the total number of active rigs amounted to 680 units (+ 6 rigs).
Technical analysis of Brent:
On the H4 chart, Brent has secured above the upper boundary of a triangle pattern that started forming this May already. The buyers have a good chance to go on rising by the pattern, pursuing the target at the 84.00 level. The moving averages also indicate the presence of an uptrend: they crossed on 7 July 2023.
Technically, this scenario is confirmed by the MACD, though just recently it demonstrated potential for a bearish divergence that could lead to a price decline. By now the MACD histogram bars have been growing for 5 periods in a row, which reveals the strength of buyers. It is worth noting that even the return of the quotes under the nearest support level of 77.00 will lead not to a price reversal but only to a test of the upper boundary of the triangle pattern.
On the H1 chart, Brent is going by a bullish impulse. The moving averages have been indicating an uptrend since 30 June 2023. After that day, there were four tests of the area between the MAs, and the price renewed the highs. All these signals confirm the strength of the current short-term uptrend.
The buyers failed to secure above the upper boundary of the bullish channel, so a minor correction to the support level of 77.00 is expected, after which a new attempt to advance upwards will not be excluded. Technically, this scenario is confirmed by the MACD: its signal line has moved out of the histogram area. A negative scenario for the buyers includes a breakout of the ascending channel lower boundary with the price securing under 77.00. If this happens, the correction will drag on, and the quotes could test the 76.15 level.
Disclaimer: Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.