The Brent Oil drops after the false breakout above a very important resistance area. The current retreat is somehow natural after the impressive rally. We’ll see how long this will be because the perspective remains bullish despite a minor drop.

I’ve said in the previous days that the price should drop on the short term, could approach and reach the $66 per barrel in the upcoming week where it could find resistance again. Oil drops also because the Loonie has shown some exhaustion signs, the USD/CAD seems poised for a rebound on the short term.  Remains to see what will really happen in the upcoming hours as the Canadian data have come in better earlier, the Manufacturing Sales have increased by 3.4% in November, beating the 1.9% estimate, the indicator increases significantly after the 0.4% drop in the former reading period. Moreover, the Foreign Securities Purchases were reported at 19.56B, much above the 15.76B.

The Oil drops even if the United States Crude Oil Inventories have dropped to -6.9 million barrels in the previous week, much below the -1.4M estimated and versus the -4.9M in the former reading period.

You can see on the Daily chart that the rate has made the second false breakout above the 100% Fibonacci level, above the 50% Fibonacci line (ascending dotted line) and above the median line (ml) of the minor blue ascending pitchfork. I’ve drawn a minor descending pitchfork hoping that I’ll catch a significant drop towards the sliding line (sl2) of the ascending pitchfork. Price has tried to come back to retest the mentioned resistance levels, but failed, that’s why it should drop on the short term. Personally, I believe that only the fundamental factors could turn it to the upside again. The rate will become strongly bearish if will make a valid breakdown below the median line (ml) of the minor descending pitchfork. A buying opportunity will appear from the sliding line (sl2) or from the lower median line (lml) of the blue ascending pitchfork.