Brent Crude Oil Price Update – Strengthens Over $71.51, Weakens Under $70.17

Brent crude oil futures edged up on Friday, helped by strong U.S. labor market data that boosted demand sentiment. The market continued to be underpinned by the OPEC-led supply cuts, and U.S. sanctions against Venezuela and Iran. However, traders remained worried that rising U.S. production could loosen up the currently tight supply situation. For the week, international-benchmark Brent crude oil futures closed over one-percent lower.

On Friday, July Brent crude oil futures settled at $70.85, up $0.10 or +0.14%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend changed to down on Thursday when sellers took out the last main bottom at $70.32. The selling actually began with the formation of the closing price reversal top at $74.73 on April 25 and the confirmation of the chart pattern on April 26.

A trade through $69.68 will signal a resumption of the downtrend. The main trend will change to up on a move through $74.73.

The minor trend is also down. The minor trend will change to up on a trade through $72.78. This will also shift momentum to the upside.

The long-term trading range is $83.71 to $51.78. Its retracement zone at $67.75 to $71.51 is controlling the longer-term direction of the market.

The main range is $65.60 to $74.73. Its retracement zone at $70.17 to $69.09 is support. It stopped the selling last week at $69.68.

The short-term range is $74.73 to $69.68. Its retracement zone at $72.20 to $72.80 is resistance.

Daily Swing Chart Technical Forecast

The mixed fundamentals and the chart pattern make the direction of the market on Monday a coin flip. It all depends on who is calling the shots: trend traders or counter-trend traders.

Bearish Scenario

If trend traders take control then $71.51 should hold as resistance and sellers should drive the market into $70.17. If this level fails as support then look for the selling to extend into last week’s low at $69.88 then the Fibonacci level at $69.09. If this level fails then look for a potential acceleration to the downside into the major 50% level at $67.75.

Bullish Scenario

A bullish scenario could develop if enough buyers come in to defend $70.17. If they can create enough upside momentum then look for the rally to possibly extend into $71.51. Taking out this level will mean the buying is getting stronger, but buyers could run into resistance on a test of the short-term retracement zone at $72.20 to $72.80.

Remember that just because the main trend turned down, it doesn’t mean the market will plunge lower. There could still be a short-term counter-trend rally that helps build another secondary lower top. This is likely to occur between $71.51 and $72.80.