Brent Oil drops like a rock on the short term and seems poised to hit new lows in the upcoming days after the failure to make new highs. Remains to see what will really happen because the current drop could be only temporary. The minor drop could give us the chance to go long again on the Brent. Price is still in the buyer’s territory, so, selling the Brent is not an option as long as is traded above the 61.23 former significant low.
Technically, the rate could be attracted by some important confluence area in the upcoming days, so a further drop is favored.
Brent decreased in the previous days, even if the Loonie rallied versus the greenback. The USD/CAD dropped sharply after the Friday’s Canadian data. Remains to see how it will react after the United States Crude Oil Inventories release. The indicator is expected to stay in the negative territory for another week, it could be reported at -3.2 million barrels in the last week. The BOC Statement could shake the oil’s price as well later. The Overnight Rate is expected to remain unchanged at 1.00% level.
You can see that Brent dropped after the failure to close near the 64.97 high. Price is almost to reach the 350% Fibonacci line again in the upcoming hours, where it could find support again. Brent could be attracted by the confluence area formed between the lower median line (lml) with the 350% line and with the sliding line (SL2). Only a valid breakdown from the minor ascending pitchfork’s body will signal a larger corrective move. Technically, it should drop towards the lower median line (lml) of the ascending pitchfork after the failure to reach and retest the median line (ml).
I want to remind you that the perspective remains bullish on the Daily chart despite the minor drop, is located much above very important support levels (resistance turned into support).