Brent Crude Oil Price Update – Needs to Take Out $63.91 to Reaffirm Change in Trend

Brent crude oil futures closed sharply higher on Friday and in a position to breakout to the upside after reports that the U.S. and China were offering concessions in an effort to bring an end to the lingering trade dispute between the two biggest global economies. Also underpinning the market were reports showing that OPEC and its allies had cut production in December, a month before the scheduled output cuts were to begin on January 1.

On Friday, March Brent crude oil futures settled at $62.70, up $1.52 or +2.42%. For the week, the market was up $2.22 or +3.54%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. It took nearly a month to clear out the short-sellers, but the main trend finally changed to up on Friday when buyers took out the main top at $62.47. The new swing bottom is $58.91. A trade through this level will change the main trend to down.

The main range is $63.91 to $50.31. Trading on the strong side of its retracement zone at $58.71 to $57.11 is also helping to generate the upside bias. This zone is new support.

The major upside target is the long-term 50% level at $67.88.

Daily Swing Chart Technical Forecast

Based on Friday’s upside momentum, the direction of the March Brent crude oil futures contract on Monday is likely to be determined by trader reaction to the previous main top at $62.47.

Bullish Scenario

A sustained move over $62.47 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to extend into the December 7 main top at $63.91. This is a potential trigger point for an acceleration to the upside with the next major target the 50% level at $67.88.

Bearish Scenario

The inability to sustain a rally over $62.47 will indicate that Friday’s change in trend was triggered by buy stops rather than aggressive buying. This will also indicate the return of sellers. This could fuel a short-term retracement of the rally from $58.91.

The whole rally will weaken if $58.91 fails. However, don’t expect an acceleration to the downside until the main 50% level at $57.11 fails as support.