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, 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 16. If they don’t stop there, we could see them pushing towards the low of May 19, at 105.75, where another break could carry larger bearish implications.
The price could fall to 101.65, marked by May 11, or near the 99.70 zone, defined as a support by the low of Apr. 25. Looking at our short-term oscillators, we see that the RSI lies slightly below 30, while the MACD runs below its zero and trigger lines. Both indicators detect strong downside speed and support the notion of 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 Jun. 8 and 14.
