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17 Jul

Brent Failed to Rise Despite Improved Sentiment

July 17, 2023

By RoboForex Analytical Department

Crude oil prices have paused in their rally. Brent quotes on Monday dropped to 79.20 USD per barrel.

One of the reasons for this local decline might be the market decision to lock in a part of the profit after the steady growth earlier. This version is also supported by the fact that today is the first work day after the weekend.

At the same time, the commodity market sentiment improved noticeably over the last week. Large investment houses still expect a shortage in crude oil supply in the second half of this year, which looks like a favourable factor, keeping in mind the current demand parameters.

The buyers are equally supported by the fundamental background. The geopolitical situation in Libya is unstable, which might lead to problems with the supply of energy carriers.

Technical analysis of Brent:

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On the H4 Brent chart, the structure of the third wave of growth is developing. At a certain point, the quotes rose to 78.00. A consolidation range formed around this level, the price broke it upwards and extended to 81.45. Today the market is correcting this growth. A technical return to 78.00 is expected with a test of this level from above. Next, a rise to 84.00 is to follow. This is a local target. After the quotes reach this level, a new correction to 78.00 could develop, followed by an increase to 85.00. This is the first target. Technically, this scenario is confirmed by the MACD: its signal line is at the highs, moving out of the histogram area, which is a signal in favour of a decline to zero.

On the H1 Brent chart, a corrective wave to 78.00 is developing. After it is over, a wave of growth to 84.00 is expected to start. This is a local target. Technically, this scenario is confirmed by the Stochastic oscillator: its signal line is under 20, ready to go on growing to 50. And if this level also breaks, the potential for a rise to 80 could open.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.


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