The Brent Oil has continued to decrease in the fresh start of the day, could drop much deeper because has fallen below an important confluence area, we still need a confirmation here that the rate will slide further, personally I’m expecting for a fresh new signal because the rate is still trading above a major static support, the downward movement will resume only if the price will fall blow the 42.46 major obstacle. The price remains heavy, even if the USD has started a bearish momentum, the Loonie has managed to recapture ground versus the greenback, but unfortunately the Oil remains sluggish.

The Brent Oil is decreasing further because the United States Crude Oil Inventories have produced a big surprise in yesterday’s trading session, the Crude Levels have increased to 1.7 million barrels in the previous week, even if the traders have expected to see a drop to -2.1M, the US Crude Stocks have increased again after 10 weeks and have forced the Oil price to decrease further, the rate has resumed the yesterday’s candle, has reached fresh new lows, but is located right now in a strong support area, we’ll have to be patient to see what will happen next, the question is if will have a breakdown or a bounce back.

You can see that the price has dropped below the second warning line (WL2) of the previous ascending pitchfork, has managed to drop below the 38.2% retracement level (drawn with black) and now is challenging the 38.2% retracement level that was drawn on the last ascending swing, the rate continues to decrease inside the minor descending pitchfork, has retested the median line (ml) and now is targeting the lower median line (lml), the price could find strong support at the 42.46 or lower at the 50% Fibonacci line (ascending dotted line), a drop below these major support levels will attract more seller’s, which will drive the price much below the $40 per barrel, we could see the rate even at $37 / barrel in the coming months if the OPEC will fail again to freeze or to cut the production.