Despite an ongoing US driving season weakness in the world’s 2nd largest economy and biggest oil importer, China continue to weigh on Oil prices with the black gold pushing under the late June consolidation floor. At this point with geopolitical tensions largely priced in the main concern of the market is actual barrels to be consumed and pumped out from under the ground. On the other side of the equation market is viewing Saudi Arabia’s voluntary limits to its production as not enough to create scarcity given the US ability to supply its domestic markets.
Resistance
- 84.67 – Intraday Consolidation Resistance
- 83.63 – Daily Consolidation Floor
- 83.17 – 50D Moving Average
Support
- 82.71 – Yesterday’s Low
- 81.47 – Daily consolidation Floor
- 80.28 – Intraday Consolidation Ceiling
With the daily scale bearish breakout, immediate risk for Brent Crude appears to be for a follow through drop atleast testing the next daily scale consolidation floor at 81.47. Use a break of yesterday’s lows as an excuse to jump short for 81.47 though said price may also be seen as a possible bounce off point. Still we would look for an hourly consolidation and long tails before we consider buying. Note a push above 83.63 may also be seen as a bullish entry as it triggers an hourly scale double bottom though with limited expectations on the upside for now.
