In today's technical analysis, let's take a closer look at Brent Oil, which is currently struggling around a critical support level. Despite this battle, the overall sentiment remains firmly negative.
Looking at the bigger picture, we can observe a large symmetric triangle pattern, marked by black lines. Earlier this month, we saw a breakout to the downside from this formation, which is typically a strong signal to sell. As expected, the price has continued to drop, reflecting the bearish momentum in the market.
After the breakout, Brent Oil has encountered a horizontal support level, marked in blue, which aligns with the lows from the first half of 2023. While there has been a small bounce off this support, it hasn't been convincing, as demand remains weak. The price continues to hover near this level, and a breakdown below this support would confirm the long-term sell signal, potentially triggering further declines. If this support is broken, it could be the final confirmation of a continued bearish trend, driving oil prices even lower.
The current sentiment remains negative, and for the outlook to shift toward a more bullish scenario, the price would need to break above the orange downtrend line and re-enter the triangle. However, the chances of this occurring seem slim given the lack of demand visible on the chart.
In summary, Brent Oil is facing significant bearish pressure, and unless we see a reversal of momentum, the path of least resistance remains to the downside.