The Brent crude oil has reaffirmed support since Monday. With the oversold daily indicators and concerns over delta spread in China eases out.
Technically speaking, the outlook remains favorable; the parallel support in the daily chart and daily indicators are very upbeat. Under these conditions, the price can be expected to rally towards the nearest resistance at $71. A breakout above this could point to a new acceleration of the uptrend towards $75. Pull-backs cannot be ruled out. Of course, but it should be seen as being merely by way of a correction. But bulls’ gains control once Brent closes above $71. On the way, down $64-63.50 will be a crucial support level in the near term. A decisive break down below 200MA will open gates towards $60 levels.
From a medium-term perspective, oil remains in a range-bound territory. But further dollar strength in the wake of the Fed tampering signal could give more confirmation. Oil bulls required dollar weakness with increased risk appetite. These two lacks for the past couple of days-so do the strength of the Brent.
For the past couple of weeks, the delta variant is a hot topic everywhere. In Asia, the spread is slowing, as per sources.
China reported its first day of zero COVID-19 cases for the first time in over a month. The world’s second-largest crude oil consumer had been battling an outbreak in critical regions such as Beijing, which had seen a swathe of restrictions implemented to control the spread, ANZ reported.
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