back
Details Cookies
Hong Kong S.A.R
Cookie policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

Technical Update - Brent and WTI Crude oil set for strong rebound Technical Update - Brent and WTI Crude oil set for strong rebound Technical Update - Brent and WTI Crude oil set for strong rebound

Technical Update - Brent and WTI Crude oil set for strong rebound

Commodities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  Brent and WTI crude oil have formed bottom and reversal patterns and are set to rebound strongly. 7-10% short-term upside from current levels could be seen. Medium-term downtrend seems to be exhausting. Monday lows are key!


Today's Saxo Market Call podcast.
Today's Market Quick Take from the Saxo Strategy Team

Brent Crude oil formed a Hammer candle Monday bouncing from 200 weekly Moving Average. A short sweet rally could be seen to 0.618 retracement at 80.40 but an extended bounce to 0.786 retracement at 83.19 is not unlikely before Brent could resume downtrend.
However, medium-term Brent is in a down trend (weekly chart) supported by negative RSI. But RSI is showing divergence indicating an exhaustion of the downtrend.   
If Brent drops back below Monday trough at 70.13 down trend resumes.

For Brent to reverse the down trend a close above 83.48 thus closing above the daily cloud is a minimum requirement. The upper falling trend line on the daily chart will act as a resistance. For the medium-term downtrend to be reversed a close above 86.75 is needed. First indication of that scenario to play out would be a break of the upper falling trendline.   

Source all charts and data: Saxo Group

WTI Crude Oil bounced from the 200 weekly Moving Average and minor support and 0.382 retracement of the entire uptrend since WTI went to minus 40. Forming a Hammer candle Monday indicates a bottom and reversal. WTI seems set for a 0.618-0.786 retracement of the past few weeks of sell-off i.e., up to 74.50-77.34.

If WTI drops back below Monday low at 64.12 the medium-term downtrend is extended possibly down to 57.25. However, Weekly RSI is showing divergence thus indicating an exhaustion of the downtrend.

If WTI bounce continues higher to close above the medium-term falling trendline and above 80.95 the downtrend has reversed.


 

RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged foreign exchange trading); Type 4 Regulated Activity (Advising on securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.