Brent Crude Oil Technical Analysis and Short-Term Forecast
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November Brent crude oil held the 50 percent retracement of the decline from $71.93 and the 200-day moving average on a closing basis on Monday. Today’s decline retraced nearly 50 percent of the rise from $64.54 and has put prices back below the 20- and 50-day moving averages. This suggests that the corrective move up from $64.54 is complete.
Tomorrow, look for a test of the 62 percent retracement at $66.1. Settling below this will call for another attempt to take out the 62 percent retracement of the rise from 57.81 and the 100-day moving average at $64.9. Closing below $64.9 will clear the way for another test of the $64.6 smaller than (0.618) target of the wave down from $76.39. This is a bearish decision point because settling below $64.6 for a few days would open the way for an eventual test of this wave’s $60.0 equal to (1.00) target and break the bottom trend line of a large flat descending triangle around $64.5.
That said, the move up from $64.54 stalled short of the upper trend line of the flat descending triangle pattern. Should prices rally again and close above $68.6, look for a break higher out of the pattern to challenge the $69.1 smaller than target of the wave up from $64.5. This is also the 62 percent retracement of the decline from $71.93. The wave up from $64.5 connects to $72.0 as the equal to target.
