Brent Crude Oil Price Update – Holding Above $71.31 Puts Market in Bullish PositionBased on last week’s price action and close at $71.26, the direction of the August Brent crude oil market this week is likely to be determined by trader reaction to the main Fibonacci level at $71.31.
Brent crude oil futures finished higher last week on concerns over supply disruptions in the Middle East. The week started with Saudi Arabia reporting a drone attack on its infrastructure. At mid-week, gains were limited a little by rising U.S. stockpiles and production. Prices rose again on Friday until a report that U.S.-China trade talks had broken up, triggered a late session sell-off.
Last week, August Brent crude oil futures settled at $71.26, up $1.62 or +2.27%.
Prices are expected to firm early this week due to week-end events. On Sunday, Saudi Energy Minister Khalid al-Falih said there was a consensus among OPEC and its allies to drive down crude inventories “gently”, but his country would remain responsive to the needs of what he called a fragile market.
There was some sword rattling on Sunday also with President Trump Tweeting he told Iran to never threaten the United States, warning the Islamic Republic that if it wants a fight, it would be “the official end of Iran.”
Weekly Technical Analysis
The main trend is up according to the weekly swing chart. A trade through $73.95 will signal a resumption of the uptrend. The main trend will change to down on a trade through $64.12.
The minor trend is also up. A trade through $68.02 will change the minor trend to down. This will also shift momentum to the downside.
The main range is $83.30 to $51.90. Its retracement zone at $67.60 to $71.31 is controlling the longer-term direction of the market. Crossing to the strong side of this zone will turn it into support.
The short-term range is $51.90 to $73.95. If the main trend changes to down then its retracement zone at $62.93 to $60.32 will become the primary downside target.
Weekly Technical Forecast
Based on last week’s price action and close at $71.26, the direction of the August Brent crude oil market this week is likely to be determined by trader reaction to the main Fibonacci level at $71.31.
A sustained move over $71.31 will indicate the presence of buyers. If this move creates enough upside momentum then look for buyers to drive the market through the uptrending Gann angle at $72.90.
Overtaking $72.90 will indicate the buying is getting stronger with the next potential target the main top at $73.95. Taking out this top will signal a resumption of the uptrend with a downtrending Gann angle at $75.05 the next likely target. This is the trigger point for an acceleration to the upside.
A sustained move under $71.31 will signal the presence of sellers. If this move creates enough downside momentum then look for a test of the minor bottom at $68.02, followed by the main 50% level at $67.60. The selling pressure could increase on a move through this level with the next target a downtrending Gann angle at $66.80. This is a potential trigger point for an acceleration to the downside.