Brent Futures Bearish

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  • The market remains in a neutral as it is in a range between USD 61.50 and USD 57.23 with flat EMA’s confirming near-term price action is neutral. 
  • Bearish as price remains below longer-term averages. 
  • Though technically bearish to neutral, an open interest increase from the USD 55.88 low and higher volume on bull days suggesting buyers stepping back.
  • Downside moves that close below range support (USD 57.23) with the RSI below 50 would indicate market weakness targeting USD 55.88 or lower. 
  • Upside moves that close above USD 61.50 supported by the RSI crossing 50 currently 47 would give near term upside targets at the 55 and 200 period daily MA’s.

Technically the Brent futures remain bearish to neutral as it technically remains in range between USD 61.50 and USD 57.23, reports FIS. 

Volume increase on upside moves 

The market did break below the USD 57.67 support but failed to close below support indicating the range remained intact. Price continues to trade below longer period MAs.

On a positive note there is a volume increase on upside moves whilst holding on support levels. Open interest has dropped slightly but remains higher than when the market was at its lows, suggesting there is some form of accumulation build going on at these levels. 

Technical picture neutral/bearish 

The RSI having produced a small divergence (bull) is going up and approaching the 50 line, but ultimately is still in bear territory at this point.

If the futures do close above the USD 61.50 range resistance, then technical targets remain at the 55-200 period MA resistance.

On the last report we highlighted the technical picture was neutral/bearish and this remains the case.

Bull Argument

  • Downside support holding 
  • Increased volume on the downside rejection candle (03-09-19) 
  • Small bullish divergence on RSI 
  • Increased volume on up days

Bear Argument

  • Technical resistance held price makes lower high and lower low (partly due to futures roll) 
  • Price below 200 and 55 period MA’s 
  • RSI below 50

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Source: FIS

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