Brent crude oil edged north on Thursday, after it hit support near the psychological zone of 60.00, which currently coincides with the 200-EMA on the 4-hour chart. On the 9th of January, the price crossed above that EMA for the first time since the 17th of October, which combined with the fact that Brent holds above the short-term uptrend line taken from the low of the 26th of December paints a positive near-term picture in our view.
At the time of writing, the black liquid is testing the 62.05 key resistance zone, the break of which may confirm a forthcoming higher high on the 4-hour chart and could pave the way for the 63.50 area, which provided decent resistance from the 4th until the 7th of December. If that area fails to stop the price from drifting higher, then we may experience extensions towards our next potential zone of resistance, at around 64.75, marked by the high of the 21st of November.
The RSI rebounded from slightly below its 50 line and now looks to be heading towards 70, while the MACD lies within its positive territory, slightly above its trigger line. Both indicators detect upside momentum, but the MACD is currently pointing sideways, which supports our choice to wait for a break above 62.05 before we get more confident on the continuation of the prevailing short-term upside path.
In order to start examining the case of a trend reversal to the downside, we would like to see a decisive dip below 59.00. Such a move would bring Brent below the aforementioned uptrend line and would also confirm a forthcoming lower low. The bears may then aim for the lows of the 7th and 8th of January, at around 57.30, or the inside swing high of the 2nd of the month, near 56.50.
