Brent Crude Oil Price Futures (BZ) Technical Analysis – Needs to Clear $64.46 to Extend Rally

International-benchmark Brent crude oil futures are trading higher on Wednesday with the move being underpinned by speculative buying tied to concerns about supply disruptions in the Middle East and a private industry report that showed a much bigger than expected drawdown in crude stockpiles. Later today, investors will get the opportunity to react to the U.S. Energy Information Administration’s weekly inventories report.

At 06:13 GMT, September Brent crude oil futures are trading $64.03, up $0.20 or +0.31%.

Buyers are also reacting to the news that the United States and China would renew trade talks starting next week. This helped ease concerns about lower demand due to a weakening global economy.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The current four day rally doesn’t signal a shift in momentum, but rather a normal retracement of last week’s steep sell-off.

A trade through $61.29 will signal a resumption of the downtrend. The main trend will change to up when buyers take out the $67.64 main top.

The short-term range is $67.64 to $61.29. Its 50% level at $64.46 is acting like resistance. Additional resistance is a series of retracement levels at $65.04 and $65.91.

The main range is $58.47 to $67.64. Its retracement zone at $63.06 to $61.97 is support.

Daily Technical Forecast

Based on yesterday’s high and the current price action, the direction of the September Brent crude oil market on Wednesday is likely to be determined by trader reaction to the short-term 50% level at $64.46.

Bullish Scenario

A sustained move over $64.46 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the 50% level at $65.04. Overtaking this level could extend the rally into a downtrending Gann angle at $65.39. Since the main trend is down, sellers could come in on a test of this angle.

Bearish Scenario

A sustained move under $64.46 will signal the presence of sellers. This could create the downside momentum needed to challenge the 50% level at $63.06. If this fails then look for the selling to possibly extend into an uptrending Gann angle at $62.72.