Brent Crude Oil Technical Analysis and Short-Term Forecast
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Brent crude oil continues to hold above the crucial $60.1 level. This is in line with the equal to (1.00) target of the primary wave down from $75.43, the intermediate (1.382) target of the wave down from $75.43, and the psychologically important $60.0 threshold. This is a prime area for a correction. Friday and Monday’s hammers, an intraday double bottom around $60.1, today’s bullish engulfing line, and a daily KasePO PeakOut (oversold signal) also suggest that a correction should occur before settling below $60.1. Note that the last PeakOut occurred at the $57.88 swing low in early April. While this move up is not expected to be as significant, the confirmation of the PeakOut has shifted the near-term odds in favor of a larger correction in the coming days.
Today’s rise tested and held the $62.1 equal to (1.00) target of the wave up from $60.07 at $62.1. The subsequent pullback held the 50 percent retracement of the rise from $60.07. Brent crude oil is rising again late this afternoon and is expected to test $62.3 tomorrow. Closing above $62.3 will confirm the daily hammers and open the way for the $62.7 target of the double bottom to be fulfilled. This is also the intermediate (1.382) target of the wave up from $60.07, the equal to target of the wave up from $60.35, and the 89 percent retracement from $63.04. Settling above $62.7, which will also be in line with the trendline down from $69.87 in two days, might be a challenge, but this would call for a test of $63.8 and possibly higher.
Nevertheless, the call for tomorrow remains tight because the downtrend is still firmly intact, and $62.1 was held today. Taking out the 62 percent retracement of the rise from $60.07 at $60.9 would warn that the corrective move up is failing and call for another attempt to settle below key support at $60.1. Upon a close below $60.1, the near-term odds will shift back in favor of Brent crude oil falling to $59.3 and likely the next confluence point at $58.5.
