Brent crude oil prices failed to break through the technical support zone of $69-73 per barrel, suggesting a likely upward correction for further bearish gains.
The technical analysis indicates a high probability of breaking through this support with a subsequent drop to at least $61. However, this is a long-term prospect with a horizon of several months, but it is possible that the market could make such a long squeeze in a shorter period of time. This strong technical support zone began to form in the fall of 2021, and then the price confirmed it several times during these four years, bouncing higher. However, every support or resistance level weakens sooner or later. In this case it can be seen in the successively declining local highs, and the price literally "sticking" to the level.
This scenario is fundamentally based on the uncertainty surrounding the global market, which is associated with the revision of all trade relations between countries. In addition, high restrictions on Chinese imports in the United States may significantly reduce the need for oil in China. The market also does not rule out a possible easing of U.S. sanctions against the Russian oil and gas sector, which is also favorable for holders of short positions in oil.
However, short-term prospects for Brent, as mentioned above, suggest a bullish correction to the $70.5 level. If this correction is strongly supported by market participants, the technical target of this upward movement will be the level of $72.0 per barrel.
The overall recommendation is to buy Brent oil.
Profit could be taken at 70.50. A stop loss could be set at 68.50.
The volume of the opened position should be set so that the value of a possible loss, defined with a protective stop order, does not exceed 1% of your deposit.
This content is for informational purposes only and is not intended to be investing advice.
