In spite of a bigger-than-expected drop in US oil inventories, oil prices failed to catch a bid. A strong reversal occurred on the Brent (OIL) market yesterday in the afternoon after price failed to break above an important short-term resistance in the $115.25 area (orange circle). This zone is marked with previous price reactions, 200-period moving average (H4 interval) as well as 38.2% retracement of a recent upward impulse. A following pullback pushed the price to the support zone marked with 50% retracement and 50-period moving average in the $112 area. A break below may signal that a deeper pullback is looming. However, if bulls manage to defend this area, a right shoulder of the inverse head and shoulders pattern may be painted. If such defense is followed by a recovery move that pushes price above recent highs near 38.2% retracement, a stronger upward move may be on the cards. Potential range of an upside breakout from this pattern points to a move towards recent highs in $125 area.
Source: xStation5
Daily summary: The market pauses at the top
BREAKING: First U.S. inventory decline in two months, mainly due to record exports
Market Wrap: Luxury Under Pressure, AI Drives Market Divergence
OIL: oil prices are down more than 22% from recent highs 📌