Brent Crude started correcting as it ran into resistance at $ 51.80, monthly 20 EMA and has also developed a negative divergence on the weekly charts, presently trading below $ 49.45, the 5 week EMA.
The price has not closed below its 5 week EMA for two consecutive weeks during 2016 up move, but things look different this time. A deeper correction looks likely as the trigger (yellow dotted) line threatens to cross below zero, indicating a negative momentum in place for the short term. This may drive down the price and crude may correct to $ 43-44, where it could find support at the conjunction of 20 & 50 weekly EMA.
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| Brent Weekly |
The intermediate trend remains bullish with positive divergence on the monthly chart. Further the weekly trend oscillator is gaining momentum to cross over zero, which implies further upside for crude. It would be interesting to see if the resumption of uptrend after the present correction could propel Brent to $65 levels.
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| Brent Monthly |
To sum up, we may be looking at higher levels in Brent, once the short term correction is over.
See also : Brent Heading to $65 ?
