Brent Oil Breaks Sideways Trend: A Look at the Bullish Continuation
12 July 2023
In today's technical analysis, the focus is on Brent Oil - a commodity that has been experiencing remarkable technical moves and engaging price action recently. The ongoing weakness of the dollar is propelling most commodities, including oil, to new highs. Traditionally, a weakening dollar tends to be favorable for commodities, and oil is seizing this opportunity to ascend.
A pivotal moment for Brent Oil occurred on July 7th, when the price successfully broke out of the sideways trend (identified by the yellow and blue lines) that had been in place since the beginning of May. However, given the history of false breakouts (highlighted in orange), there was some speculation that the price could revert back to the sideways trend, as happened on two previous occasions, which led to significant declines.
Contrary to these expectations, the buyers managed to maintain the price above the critical horizontal support level at $77.6 per barrel. Following the breakout, this previously broken resistance level has acted as a support - a common principle of price action trading. Presently, the price is advancing within an upward channel (marked with black lines).
As long as the price remains above the $77.6 per barrel mark, the outlook for Brent Oil stays bullish. The buy signal remains intact, reinforcing the positive sentiment for this commodity.