Brent continued trading north on Wednesday, breaking above the resistance (now turned into support) barrier of 73.15. Although the black liquid continues to trade within the medium-term downside channel that’s been containing the price action since May, the latest recovery started after the price hit support near the channel’s lower bound. This, combined with the fact that Brent is trading above a short-term uptrend line taken from the low of the 15th of August, suggests that there is room for further recovery within the aforementioned downside channel.
The price now looks to be heading towards the 74.10 resistance hurdle, defined by the peak of the 14th of August, where a clear break may pave the way towards the 75.00 zone. Another break above 75.00 could invite more bulls into the action and could trigger extensions towards tour next resistance area of 75.70, marked by the peaks of the 30th and 31st of July.
Our short-term oscillators point to accelerating upside speed and support the case for some further advances. The RSI edged above its 70 line and continues to point up, while the MACD lies above both its zero and trigger lines, pointing north as well.
On the downside, we would like to see a clear dip below the short-term uptrend line and the 73.15 level before we start examining whether buyers have abandoned the battlefield. Such a break may trigger declines towards the 71.60 obstacle. Another break below that level could encourage the bears to push the rate towards the 70.60 zone or aim for another test near the lower end of the medium-term upside channel.
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