Unsettled Brent Oil: A Tug-of-War between Bulls and Bears
23 June 2023
Brent Oil witnessed a volatile week, demonstrating a tug-of-war scenario between the bulls and bears, leaving the commodity to oscillate within a key rectangle pattern.
The week commenced on a bullish note with Brent Oil setting its course towards the 77.6 resistance level. However, upon encountering the resistance (denoted by the blue color on the chart), the price recoiled, signaling a strong rejection of further upside movement.
This downward trajectory saw the price almost collapse, rapidly descending to touch the lows around the region of 72-71.6 dollars. This level represents a crucial long-term horizontal support for Brent Oil, indicated by the yellow color on the chart. The significant movement during this week saw the price traverse from local tops to local lows, reflecting a degree of uncertainty and volatility.
As we wrap up the week and look ahead to the next, Brent Oil appears poised to continue moving sideways within the rectangle. This sideways trend suggests a continued struggle for dominance between the bulls and bears in the market.
From a trading perspective, as long as the price remains within this rectangle pattern, there's an opportunity to trade the bounces. A rebound from the support level could be interpreted as a buy signal, whereas a bounce from the resistance might serve as a signal to sell. Investors are eagerly waiting for a breakout, where a breach of the upper line would provide a long signal, while a rupture of the lower line would be a strong sell signal.