Oil Price Forecast: Brent could shake out the weak hands before building on bull breakout

• The bearish divergence of the hourly chart and 4-hour chart relative strength index (RSI) indicates that Brent could revisit the top end of the flag (former resistance-turned-support) before building on the bull flag breakout confirmed earlier this week.
• Moreover, the pullback to newly established support could crowd out weak bulls (buyers with limited risk appetite) before further rally unfolds.
• At press time, the top end of the flag is located at $78.16. The major moving averages (MAs) – 50-hour, 100-hour and 200-hour- are trending north in favor of the bulls. So, the pullback, if any, will likely be short-lived.

1-hour Chart

Current Price: $79.24

Daily High: $79.68

Daily Low: $79.25

Trend: Intraday bearish

Resistance

R1: $79.68 (session high)

R2: $80.09 (yesterday’s high)

R3: $80.47 (May 17 high)

Support

S1: $78.78 (50-hour MA)

S2: $78.16 (top end of the flag)

S3: $77.80 (200-hour MA)