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  • 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