On 1 December, we outlined a descending channel on the XBR/USD chart and noted that the bearish trend was driven by fading geopolitical risks. Indeed, hopes for an end to the war in Ukraine—along with the possibility of sanctions on Russia being eased—acted as a bearish catalyst.
In addition, the International Energy Agency reaffirmed its forecast for a record supply surplus and highlighted that global inventories have reached a four-year high.
Under the influence of these and other factors, such as signs of a slowdown in the Chinese economy, Brent crude fell to a seven-week low at point A. However, today the XBR/USD chart shows a bullish reversal, again triggered by geopolitics, according to media reports:
→ The United States has intercepted a sanctioned Venezuelan tanker, which Caracas described as an “act of piracy”.
→ Ukraine has struck another vessel from the “shadow fleet” linked to Russia’s oil trade.
Technical Analysis of XBR/USD
From a bearish perspective:
→ the $62.60 level (where the blue trendline was broken) remains a significant resistance zone;
→ bulls failed to preserve the gains from the A→B rally, as the price sank further to the low at point C;
→ the nearest resistance lies around $61.70.
From a bullish perspective:
→ the lower boundary of the channel may continue to act as support;
→ Brent crude has rebounded convincingly after a false bearish break below the November low—an indication of a potential liquidity grab, suggesting that “smart money” may be siding with demand.
Given these factors, geopolitical tensions may intensify, potentially driving XBR/USD back towards the median of the descending channel.
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