The Brent Oil dropped and resumed the yesterday’s bearish candle and seems poised to reach fresh new lows in the upcoming days. Technically, it should start a larger drop after another false breakout and after the failure to reach the 59.50 previous high. Right now we still need a confirmation that we’ll have another leg down because is still trapped above some important dynamic support levels.
Price drops also because the Cable has lost some ground versus the greenback, remains to see what will happen in the upcoming hours as the Canadian data should bring some action. The figures should shake the USD/CAD and most likely will have an impact on the Brent as well. Personally, I believe that only the fundamental factors could force the rate to turn to the upside again.
Price plunged since yesterday and erases the latest gains, signaling that the bulls are too exhausted and that we have an overbought situation. I’ve said in the yesterday’s daily report that a larger drop will come if the rate will close below the median line (ML) of the major ascending pitchfork and if will retest this level. Brent dropped without a retest, actually has tried to come back above the ML in the morning, but failed to stay there.
It is trading above the 57.00 psychological level because has squeezed a little in the last hours, the next downside target will be at the 250% Fibonacci line (descending dotted line). Price could retest the upper median line (uml) of the minor descending pitchfork before will drop towards the next downside targets.