Although oil prices are driven mainly by the outlook for economic growth, interest rates, war and supply chains, technical analysis shows that Brent crude is more likely to rise than fall. Recent lows near $92 a barrel – after a 16% decline since late July – were formed between the envelopes of the moving averages locking in the movement between them. The simultaneous formation of a so-called “falling wedge” — where each subsequent swing narrows — suggests a rally back to $110 if the upper trend line is broken.
WTI – tests the neck of the double bottom formation, which coincides with the 200 MA.
We expect a breakout and execution of the figure, which will send quotes to the resistance zone at $105 per barrel. The upward movement will also be supported by the entry of the Demarker oscillator into an overbought zone, as well as the ascending series at the Sequential.
Head of Trading Dimitar Kalapov