Brent Oil drops like a rock and looks unstoppable on the short term, has resumed the corrective phase and could drop much deeper on the short term. Has touched fresh new lows today and may approach a major support area, remains to see how will react when will hit this level because a valid breakdown will confirm a larger drop for the upcoming period.

The rate has dropped also because the USD/CAD has managed to find strong support and has bounced back, the pair is trading in the green right now and is pressuring a major dynamic resistance, a valid breakout will attract more buyers, so the oil could slip much lower.

Brent dropped aggressively even if the United States Crude Oil Inventories have failed to impress in the last week, is dragged down by the technical factors. Price could increase a little again if the USD will slide in the upcoming days versus its rivals, as you already know, a weaker dollar makes the oil much cheaper for the international buyers from outside the US.

The US Crude Levels have dropped to -2.5 million barrels in the previous week, were reported much below the -1.2M estimate and compared to the -1.7M in the former reading period.

Price continues to drop on the short term and is very close to reach some major support levels, I’ve said in the previous articles that the perspective is bearish on the short term as long as is trading within the minor descending pitchfork. I’ve also said that technically, is expected to drop after the failure to stabilize above the 61.8% retracement level and above the  and after the failure to reach and retest the median line (ML) of the major ascending pitchfork.

Remains to see how will react when will hit the 505 Fibonacci line (ascending dotted line) and the 38.2% retracement level, a valid breakdown below these obstacles will confirm a major drop in the upcoming weeks and maybe months.

Personally I believe that we may still have a minor increase before will resume the downside movement, another leg higher will come only if the rate will escape from the descending pitchfork’s body and will break above the sliding line (descending dotted line).