Brent Crude Oil Price Update – Getting Close to Erasing Nearly 3-Year Rally

Based on the early price action, the direction of the March Brent crude oil market on Wednesday is likely to be determined by trader reaction to Monday’s close at $50.77.
James Hyerczyk
Crude Oil
Crude Oil

International-benchmark Brent crude oil futures are trading lower early Wednesday as investors return from the one-day holiday. Volume is below average and volatility is low. Both factors could remain under pressure until after the New Year’s holiday. The risk-off scenario in the stock market is helping to drive prices lower during the pre-market session. Traders also continue to express doubts that the OPEC-led production cuts, due to begin on January 1, will have any impact on the global supply glut.

At 0732 GMT, March Brent crude oil is trading $50.47, down $0.30 or -0.59%.

Daily March Brent Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. Today’s early weakness reaffirmed the downtrend. The main trend will change to up on a move through the last main top at $63.91.

Although a change in trend is highly unlikely, the market is in the window of time for a potentially bullish closing price reversal bottom because of the prolonged move down in terms of price and time. If successful, this move could trigger a 2 to 3 day counter-trend rally.

Daily Swing Chart Forecast

Based on the early price action, the direction of the March Brent crude oil market on Wednesday is likely to be determined by trader reaction to Monday’s close at $50.77.

Bullish Scenario

Given the prolonged move down in terms of price and time, and today’s lower-low, recapturing Monday’s close at $50.77 will indicate the return of buyers. This move will put the market in a position to form a daily closing price reversal bottom. This could trigger a strong intraday, counter-trend rally with the first upside target Monday’s high at $54.88. Taking out this level will form a new minor bottom.

A close over $50.77 will produce a daily closing price reversal bottom. If confirmed on Thursday, this could trigger the start of a 2 to 3 day counter-trend rally.

Bearish Scenario

A sustained move under $50.77 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into the June 21, 2017 main bottom at $49.16. If this level fails to hold as support then look for a further decline into the April 5, 2016 main bottom at $47.28.

The latter is the trigger point for a potential acceleration to the downside with the January 20, 2016 bottom at $42.99 the next significant bottom. This price is important because it launched the nearly three year rally in crude oil.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US