James Hyerczyk
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Brent Crude Oil

International-benchmark Brent crude oil futures finished sharply higher on Friday after recovering from a steep early session loss. The rebound rally also helped the market post a weekly gain. Earlier in the session, prices were driven more than 1% lower following comments from U.S. President Donald Trump that he has not agreed to roll back tariffs on China.

On Friday, January Brent crude oil settled at $62.51, up $0.22 or +0.35%.

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The intraday reversal was likely fueled by optimistic traders looking for more positive developments in U.S.-China trade talks over the week-end. Despite the rally on Friday, gains may be capped by concerns over rising U.S. stockpiles after the U.S. Energy Information Administration reported earlier in the week that refineries cut output and exports dropped the week-ending November 1.

Daily January Brent Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top at $63.32 on November 6.

A trade through $63.32 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through $59.21.

The minor trend is down. It changed to down on a trade through the last minor bottom at $61.59. This move confirmed the shift in momentum.

The main range is $67.02 to $55.55. Its retracement zone at $61.29 to $62.64 is currently being tested. It is controlling the longer-term direction of the market.

The minor range is $59.21 to $63.32. Its retracement zone at $61.27 to $60.78 is potential support. It stopped the selling on Friday.

The short-term range is $55.55 to $63.32. Its retracement zone at $59.44 to $58.52 is another potential support area.


Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at $62.51, the direction of the January Brent crude oil market on Monday is likely to be determined by trader reaction to the main Fibonacci level at $62.64.

Bullish Scenario

A sustained move over $62.64 will indicate the presence of buyers. The first upside target is the main top at $63.32, followed closely by a minor top at $63.44. This is a potential trigger point for an acceleration to the upside. The daily chart indicates there is plenty of room to rally between the minor top at $63.44 and the main top at $67.02.

Bearish Scenario

A sustained move under $62.64 will signal the presence of sellers. If this move can generate enough downside momentum then look for a break into the pair of 50% levels at $61.29 to $61.27, and the support cluster at $60.78 to $60.66.

Look for a steep break into $59.44 to $59.21 if $60.66 fails as support.

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