Prices of the European benchmark Brent crude oil could have met significant base around the $56.00 mark per barrel, suggested Heng Koon How, CAIA, and Quek Ser Lang, Market Strategists at UOB Group.
Key Quotes
“Brent crude futures closed at $60.22 last Friday but gapped higher upon opening this morning as news of drone attack on Saudi oil facilities sent it soaring to a high of $71.95. The rapid rise not only took out the $65.50 resistance but also the July’s top of $67.65. The breach of the July’s top has added significance as the level is close to the declining trend line resistance connecting $86.74 and $75.60 (the highs in October 2018 and April 2019 respectively)”.
“While it is premature to expect a sustained rise, weekly MACD is poised to cross into positive territory for the second time this year (confirmation only by end of this week). This coupled with the break of strong resistance levels suggests that August’s low of $55.90 could be a significant bottom (note that this level is also very close to a rising trend line support). In other words, $55.90 may not come back into the picture for the next several months (note that there is another solid support level near $52.50). On the upside, a weekly closing above $72.00 would indicate that Brent is ready to challenge $75.60, possibly $78.50“.
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