Brent continues to go down. So far, it is trading at $101.32, which is above the psychologically important level, but the downside risks are putting pressure on the asset.
The Chinese economy’s slow recovery significantly influences the global economy. In addition, there are still some concerns that the US Fed’s aggressive policy might lead to a global economic slowdown and, as a result, a strong decline in demand for energy.
Oil prices have fallen since the beginning of June after attempting to fix above $126.00. Despite remaining quite volatile, they are slowly falling. The bears will likely take another shot at breaking $100.00 and continue pushing the asset downwards.
Moreover, the National Oil Corporation of Libya is desperate to increase oil production by up to 1.2 million barrels per day. Remember that the production was just 560 thousand barrels on Jul. 11, and now it is already almost 1 million. This increase puts pressure on prices, and market sentiment will probably remain bearish.
In the H4 chart, having completed the ascending wave at 108.18, Brent continues the correction down to 100.80 and may later form one more ascending structure to break 108.74. After that, the instrument may continue trading upwards with the short-term target at 116.76. From the technical point of view, this scenario is confirmed by the MACD Oscillator: its signal line is close to 0 and may soon resume growing to update the highs.
As we can see in the H1 chart, after finishing the descending correctional structure at 100.80, Brent is consolidating around 101.00. Possibly, the asset may break the range to the upside and start another growth with the target at 104.50, or even extends this structure up to 108.70. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: after breaking 20, its signal line is heading toward 50. Later, the line may break the latter level and continue growing to 80.
Disclaimer: Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.