- Monday’s candle is signaling buyer exhaustion and scope for correction.
- A pullback to the 5-day average support looks likely.
Brent oil has likely created a temporary top and could suffer a deeper pullback to a short-term moving average support.
The black gold on Monday clocked a high of $70.72 but failed to close above the Sept. 16 high of $69.64 and ended on a negative note at $68.41, essentially carving out a candle with a long upper shadow – a sign of buyer exhaustion.
Monday’s drop also confirmed a bearish divergence of the relative strength index and the MACD histogram.
All-in-all, brent oil could correct or drop to the ascending 5-day moving average support, currently at $67.56. The case for a drop to $67.56 would weaken on an hourly close above $67.46.
Daily chart
Trend: Correction likely
Technical levels