Brent: Struggles Again Under 112 But Lt Picture Still Appears Bullish

After a 4th failed attempt to break convincingly above the 112 level and the most bearish single day in over 6 months we have to ask ourselves where the next logical area of support may be...

Below the longer-term view of Brent and we can see how price has struggled around the 112 area. However whilst the triangle may not be textbook we can see clear higher lows forming to suggest an eventual continuation above 112.

This is where longer-term cycle analysis could aid us for timing which I will follow up with subsequent analysis.

I have highlighted the Evening Star reversal candle which I personally find to be a very reliable reversal signal, particularly on higher timeframes such as the weekly or monthly. However also note the lower volume on this week's bearish candle. This should be expected due to liquidity being much thinner over the festive period and due to fewer participants being active on the markets, this also has the knock on effect of prices becoming easier to move.

So the validity of this pattern will only become known as liquidity returns.

BRENT DAILY:

The bearish candle was the heaviest candle of the week and does raise suggestions of the 107.50 candle breaking. I have more confidence in the next level around 106 as this comprises of the 200eMA and pivotal S/R. A break below 107.50 would confirm a double top pattern however the 106 support and rising trendline may scupper any chances of it reaching the projected target around 102.0

For now my next target remains at 106 where I will assess price action to see if it presents buying opportunities or a resumption of losses.


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