Seasonal factors will likely be the main driver for oil over the next month or two, i.e. US driving season providing real demand for black gold. That said we will not discount the potential effects of monetary policy to this picture as an upcoming easing cycle may just convince people there will be good time ahead. For now we will just bring to peoples attention to our weekly charts showing the extent of the rally in Oil around this period last year.
Resistance
- 86.88 – April 29 low
- 86.05 – Friday’s High
- 85.36 – Daily Consolidation Resistance
Support
- 84.41 – Friday Low
- 83.70 – Previous Week’s Low
- 83.13 – Intraday High/Low
We’ve already seen an upside gap from the open in Brent, this in the context of Friday’s failed bullish breakout. Given the high wave doji from the previous week it is difficult to argue just going long in Oil unless we actually see the high from then getting cleared. For now we would prefer a more cautious buy on dips approach that chasing a rally ideally seeing long tails in the hourly chart off 84.41. Or give us a daily close first above the 86.05 region.
