Brent oil is falling again. The asset is trading below $71 and may continue plunging.
The negative news came from the media – Bloomberg reported a possibility of new lockdowns in Europe, the Netherlands-style, where social coronavirus-related restrictions will remain in effect until Jan. 14, 2022. It is not beyond the reach of reason to suggest that other European countries may follow the Dutch path.
This, in its turn, may reduce business and consumer activity and the demand for energies. Last Friday's report from Baker Hughes showed that the Oil Rig Count added four units, up to 475. This rising tendency is another factor that pressures oil prices.
Technical View
In the H4 chart, after rebounding from 74.00, Brent is growing towards 76.38 and forming the first wave within the uptrend. Right now, the asset is correcting and may reach 71.00.
After that, the instrument may form the second rising impulse to break 76.40 and then continue trading upwards with the short-term target at 82.00.
From the technical point of view, this scenario is confirmed by MACD Oscillator. Its signal line is moving above 0 inside the histogram area, which means that the correction in the price chart may be over soon and the line may continue its movement to reach new highs.
As shown in the H1 chart, Brent is forming a new consolidation range around 73.30 and breaking through it towards the downside. Brent has almost completed the correction by falling and reaching 71.00.
Possibly, the asset may form a new consolidation range and later break it to the upside. After that, the instrument may resume growing with the first target at 73.89.
From the technical point of view, this idea is confirmed by the Stochastic Oscillator: its signal line is steadily moving upwards to break 20 and then continue growing to reach new highs.
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.