That being said, keep in mind that Monday is Martin Luther King Jr. holiday in the United States and therefore oil will only trade for about half the session on Monday around the world electronically. And that could have a major impact on what happens next. Furthermore, we could or could not, we just don’t know, see military action over the weekend. So, this is a market that’s primed to either jump or fade, and it’s probably nowhere between the two.
The candlestick does suggest that maybe people think that military action isn’t going to happen, but we’ll just have to wait and see. I would also point out, though, that this all started at the $55 level, an area that’s pretty obvious on this chart as support. So expect volatility. If we can break that 50-week EMA, we could go much higher. That would call for $64 to be broken essentially, maybe $63.50 to the upside, and then we could continue going higher. Otherwise, it’s a sell-the-rally type of situation.
Brent Crude Oil Weekly Technical Analysis
Brent markets look very much the same and actually tested the 50-week EMA at the $67 level but failed. We are below the $65 level as I record this. That is a major barrier. And again, a lot of this is going to come down to whether or not anything happens over the weekend.
Ultimately, this is a market that also looks at a floor underneath in the form of $58.50, and I think it is trying to find its bottom. Keep in mind that supply far outstrips demand at the moment, but we have gotten to the point where I think oil is priced relatively reasonably for all of the geopolitics and the supply and demand issues. So, the default would actually be fade the rallies and maybe stay in some type of $5 consolidation in this range, and that is true for both grades.
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