Markets

Brent Oil Finds Consolidation Support Near $100/bbl

Forex Technical Update

Brent Crude

Brent 4H Chart 8/10/2011

Bullish Divergence , Negative Reversal :

- Brent is supported after cracking the $100/bbl level. We also see a bullish divergence with the RSI in the 4H chart.

- However, also note that if the market doe not close out the gap (we started the week with), it could be in the process of developing a negative reversal signal (higher RSI high, lower price high), which suggests bearish continuation .

- A rally to 109.50 would rid this signal, but is vulnerable to being faded there as well. Only a break above 112.05 and a break of the RSI above 60, suggest a reversal back to the upside.

- Looking at the daily chart, we see that the upside outlook is losing ground, expect maybe in the short-term.

- The RSI maintains below 60, and shows a bearish momentum. Price action has broken below the 200SMA.

- However, at this point, we have completed 3-swings down, which invites bullish intent.

- If we can break above 109.50 and then maintain above 107.00 , we should be heading towards 112.00-113.00 area.

- Then, if the market respects 113.00 central pivot of the consolidation pattern, we should be able to retest the 100 level again.

- 98.25 and 91.50 area 50% and 61.8% retracement targets below 100.

Brent Daily Chart 8/10/2011

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Fan Yang CMT

Chief Technical Strategist

FXTimes

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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