Brent Crude Oil Price Update – Upside Momentum Increases on Sustained Move Over $58.95

Based on the early price action and the current price at $58.17, the direction of the December Brent crude oil futures contract the rest of the session on Monday is likely to be determined by trade reaction to the minor pivot at $57.55.
James Hyerczyk
Brent Crude Oil

International-benchmark Brent crude oil futures are trading lower early Monday, showing no following-through to the upside following the previous session’s counter-trend rally. The market is also trading inside Friday’s range, which tends to indicate investor indecision and impending volatility.

Despite the two day rally to end the week, the market is still weak with concerns over demand outweighing supply worries. A slowdown in the economy was the catalyst behind the price action last week. This week, the focus shifts to U.S.-China trade talks, which are set to take place in Washington on October 10-11.

At 04:26 GMT, December Brent crude oil is trading $58.17, down $0.20 or -0.34%.

Daily December Brent Crude Oil

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum made a slight shift to the upside with the formation of the closing price reversal bottom at $56.15 on October 3 and its subsequent confirmation on October 4. The chart pattern doesn’t indicate a change in trend, but it could lead to a 2 to 3 day counter-trend rally.

A trade through $56.15 will negate the chart pattern and signal a resumption of the downtrend. The main trend will change to up on a move through $68.32.

The minor trend is also down. It changes to up on a move through $61.91.

The minor range is $56.15 to $58.95. Its 50% level or pivot at $57.55 is minor support.

The main range is $68.32 to $56.15. Its retracement zone at $62.24 to $63.67 is the primary upside target.

Daily Technical Forecast

Based on the early price action and the current price at $58.17, the direction of the December Brent crude oil futures contract the rest of the session on Monday is likely to be determined by trade reaction to the minor pivot at $57.55.

Bullish Scenario

Holding above $57.55 will indicate the presence of buyers. Overtaking the uptrending Gann angle at $57.92 will indicate the buying is getting stronger.

Taking out $58.95 will make $56.15 a new main bottom. This could trigger a surge to the upside with an uptrending Gann angle at $60.54 the first upside target, followed by a downtrending Gann angle at $60.82. We’re not likely to hit this area today, but the angles are likely to be in play all week.

Bearish Scenario

A break under the uptrending Gann angle at $57.92 will be the first sign of weakness. Crossing to the weak side of the pivot at $57.55 will signal the presence of sellers. This could trigger an acceleration to the downside with the next targets an uptrending Gann angle at $56.60 and the closing price reversal bottom at $56.15.

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