In today’s analysis, we focus on Brent Oil, which has been struggling since the middle of January. The commodity has shown signs of weakness, though it occasionally makes attempts to recover, and we are currently witnessing another one of those attempts.
The blue formation on the chart represents an inverse head and shoulders pattern, which could indicate a potential reversal. However, this pattern is not yet active, as Brent has not broken above the red neckline, a crucial resistance level. Until a daily close above this red neckline occurs, the setup remains in limbo.
A successful breakout above this resistance could serve as a buy signal, reinforcing a recovery scenario. Such a move would not only confirm the inverse head and shoulders, but it would also indicate that the yellow horizontal support has held strong. Additionally, Brent would escape from the wedge pattern, highlighted by green trendlines.
However, at present, the sentiment remains negative, and Brent continues to face downward pressure. There is a higher probability of a break below the yellow support unless a clear breakout above the red neckline and upper green trendline occurs. For now, traders should monitor these key levels closely to confirm the next directional move.