Brent crude oil futures stretched their two-month rally to a more than three-month high of 44.00 last Tuesday before pulling slightly lower. The RSI seems to be gaining momentum above the 50 level, while the stochastic oscillator is ready to post a bullish crossover within its %K and %D lines above the oversold territory. The market trend is likely to hold on the upside as long as the price holds far above the moving averages in the short term.
If oil surpasses the 44.00 psychological mark, it should extend its upside structure, meeting immediate resistance at the 50.0% Fibonacci retracement level of the downward move from 71.25 to 19.96 at 45.62. Clearing that zone, the next stop could be at around 48.90 and the 61.8% Fibonacci of 51.72.
On the other hand, should recent weakness continue below the 44.00 barrier, support to the downside could be initially detected within the 20-day simple moving average (SMA) and the 38.2% Fibo of 39.52. The 37.00 level, which overlaps with the 40-day SMA could act as support too before a more important battle starts near 33.94 and the 23.6% Fibo of 32.04.
In the short-term picture, the sentiment turned bullish after the price rebounded on 19.96.
