Price is trading in the red on the short term after the failure to make new highs. Brent Oil turned to the downside and now is pressuring a very strong support area. A valid breakdown will signal a further drop on the short term. It remains to see what will happen because the perspective remains bullish despite the minor drop.
The current drop could be only temporary before the rate will start to increase again. Technically, the retreat is natural and it was expected after the failure to reach a major upside obstacle.
The Brent Oil price was also punished by the United States Crude Oil Inventories, which have increased to 6.8M in the previous week. The Crude Levels have jumped in the positive territory despite the -2.6M estimate and after -1.4M in the former reading period.
It remains to see what the Canadian data will bring. The inflation numbers could influence the price on the short term. The Loonie decreased versus the USD in the last days, so a further drop will force the oil price to drop as well.
You can see on the Weekly chart that the rate has failed to reach the upper median line (UML) of the ascending pitchfork signaling an exhaustion. Price tried one again to approach and reach at least the 80.88 former high, but it has failed to, so the current drop is natural and it was expected.
Right now is pressuring the upside 50% Fibonacci line of the ascending pitchfork, so a valid breakdown below it will signal a potential downside movement. Support can be found on the 100% Fibonacci line, so we need a valid breakdown below this line as well to have a confirmation that we’ll have a further drop. However, a false breakdown below the 50% line it will announce a potential upside momentum.