Summary:

• Brent Oil trading little changed on the day
• Wednesday saw a sharp move higher but failure to break resistance
• Price now testing Ichimoku cloud on H1

Yesterday saw some volatile trade in Oil following the release of the weekly DOE report. The market initially dropped on the unexpected build in US stock piles before setting off on a strong rally into the European close and retesting the 2017 highs at 64.64. This level was met with a swift rejection and the market then proceeded to hand back the previous gains to end the day in the red. 

 Brent shrugged off an unexpected build in the DOE report but failed to break above 64.64 and has now formed a possible double top. Source: xStation

Price is now testing the Ichimoku cloud on H1 and this has been below the market for the vast majority of the latest leg higher. A break below here could be seen to signal a short-term change and may lead to some of the gains seen in recent weeks handed back. 

Price is now testing the Ichimoku cloud on H1 and a break below here could be seen to signal a short term trend change. SourcE: xStation

Longer term the market remains in an uptrend but given that price has rallied so strongly with a gain in excess of 40% since the late June low there is a chance we get a pullback. 58.83 would be a potentially key level to watch if the market does decline as this is where price broke strongly above at the end of last month. On the other hand a break of 64.64 would pave the way for further gains and would see an extension of the rally. 

 

 Brent has rallied more than 40% since the end of June and may be overdue a pullback. Source: xStation