Brent Oil rebounds from long-term downtrend line
01 March 2023
The weakening of the US dollar has been a boon for commodities, which tend to have an inverse correlation with the currency. In this analysis, we'll focus on Brent Oil, which has been range-bound for the past few weeks, struggling to find a clear direction.
Currently, the price is within a flag pattern (orange) which suggests a downside breakout given the prevailing downtrend. Furthermore, a similar formation in the past (red wedge) resulted in a profitable sell signal.
Today, Brent Oil is at a crucial juncture as it tests the long-term downtrend line (blue). So far, sellers have had the upper hand as the price has bounced off the resistance, creating a shooting star candle on the daily chart. While this is a positive sign for sellers, a proper sell signal requires a breakout of the flag's lower boundary, which could happen soon.